Your company is considering to tender for two contracts, i.e. T1 and T2 for the supply of
Certain items. The company has three options:
I. Tender for T1 only; or
II. Tender for T2 only; or
III. Tender for both T1 and T2. <b******** cost=”” ********ndering=”” for=”” contract=”” t1=”” only=”” is=”” myr=”” 50,000.=”” the=”” item=”” s********=”” ********e=”” tender=”” i=”” successful=”” would=”” be=”” 18,000.=”” <b********=”” t2=”” myr14,=”” 000.=”” <br=””>Is successful would be MYR 12,000. <b******** cost=”” ********ndering=”” for=”” both=”” contract=”” t1=”” and=”” t2=”” is=”” myr=”” 55,000.=”” the=”” item=”” supply********cost=”” ********e=”” tender=”” successful=”” would=”” be=”” 24,000.=”” <br=””>For each contract, possible tender prices have been determined. In addition, subjective
Assessments have been made of the probability of getting the contract with a particular
Tender price as in Table 1.
Note: the company can only submit one tender and cannot, for example, submit two tenders
(at different prices) for the same contract.
Option Possible tender prices Probability of getting contract
T1 only 130,000
115,000 0.200
0.85
T2 only 70,000
65,000
60,000 0.15
0.80
0.95
T1 and T2 190,000
140,000 0.05
0.65
In the event that the company tenders for both options: T1 and T2, the company either win both contracts or no contract at all.
a) What do you suggest the company should do? Why?
b) A consultant has approached your company with an offer that in return for MYR 20,000.00
In cash, she will ensure that if you tender MYR 60,000.00 for contract T2 only your tender
is guaranteed to be successful. Should you accept her offer or not? Why?</b********></b********>
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- Assignment status: Resolved by our Writing Team
- Source@PrimeWritersBay.com
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