Question: A company, Duzi Infrastructure, is considering whether it should propose two contracts ( Contract - A and Contract - B ) on offer from a
A company, Duzi Infrastructure, is considering whether it should propose two contracts ContractA and ContractB on offer from a government department for the supply of certain components. Duzi Infrastructure has three options:
propose for ContractA only; or
propose for ContractB only; or
propose for both ContractA and ContractB
If proposals are to be submitted the company will incur additional costs. The cost of proposing for ContractA only is $ The component supply cost if the proposal is accepted would be $ The cost of proposing for ContractB only is $ The component supply cost if the proposal is accepted would be $ The cost of proposing for both ContractA and ContractB is $ The component supply cost if the proposal is accepted would be $
For each option ContractA only; ContractionB only; and ContractionA and ContractionB both possible prices that Duzi Infrastructure will take are determined differently depending the bidding condition; that is how competitive the bidding is The below table shows how the possible prices vary for each bidding condition and option.
tableOptionsBidding condition,Probability,Price $ContractA only,Competitive,Noncompetitive,CompetitiveNeural,Noncompetitive,tableContractA and Contract BbothCompetitive,Noncompetitive,
To maximize the profit Price estimated cost what options Duzi Infrastructure should take? Answer using decisiontree analysis.
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