$4.$ Individual Problems $4-4$

Your company is contemplating bidding on an RFP $($Request For Proposal$)$ to produce $100,000$ units of a specialized part. Suppose, however, that the requesting company really needs only $90,000$ units of the part. Also assume that, because the part is specialized, potential suppliers do not yet possess the machines and factories needed to produce it and that overhead expenses involved in production have yet to be incurred.

Suppose the average costs of all potential suppliers are as follows:

Units

Average Total Cost

$($Dollars Per Unit$)$

$90,00011100,00010$

True or False: The requesting company can solicit lower bids by requesting $100,000$ units as opposed to $90,000.$

True

False