Question: An automobile factory needs some items for its new model and is considering supplying these parts from another company. Therefore, to supply the parts, the

An automobile factory needs some items for its

An automobile factory needs some items for its new model and is considering supplying these parts from another company. Therefore, to supply the parts, the automobile factory will offer two contracts, represented by Al and A2. An X firm is considering whether to bid for the auto factory's contract bid. If firm X goes out to bid, it will have to establish additional facilities for the production of the items and bear the cost of these facilities. If the tenders fail, firm X will incur a loss equal to the cost of these facilities. Extra facilities required to meet the conditions required by the Al contract will cost 50000 TL. These facilities will also provide sufficient capacity to meet the conditions required by the A2 contract. In addition, the production costs will be 18000 TL. The corresponding production costs for the A2 contract are 10000 TL If a tender is made only for the A2 contract, Company X will incur a cost of 24000 TL for the extra facilities required. In this case, the production costs will be 12000 TL. If only one of the A1 and A2 contracts is bid, the tender preparation cost is 2000 TL. If bids are made for both A1 and A2 contracts, the preparation cost will be 3000 TL. Estimated tender prices are determined for each contract. In addition, subjective evaluations regarding the possibility of obtaining a contract with a certain tender price are also listed below. Possible tender Probability of prices (TL) getting contract 120000 0.30 Tendering for Al only 110000 0.85 70000 0.10 Tendering for A2 only 65000 0.60 60000 0.90 190000 0.05 Tendering for both A1 and A2 140000 0.65 100000 0.95 Firm X may submit only one bid and cannot submit two bids for the same contract at different prices. If the firm bids for both A1 and A2, it will either win both contracts or not win any of the contracts. What should the company do? In order to find the solution, use decision tree analysis

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