Question

CPT Inc. is a local manufacturer of conveyor systems. Last year, CPT sold over $2 million worth of conveyor systems that netted the company $100,000 in profits. Raw materials and labor are CPT's biggest expenses. Spending on structural steel alone amounted to over $500,000, or 25 percent of total sales. In an effort to reduce costs, CPT now uses an online procurement procedure that is best described as a first-price, sealed-bid auction. The bidders in these auctions utilize the steel for a wide variety of purposes, ranging from art to skyscrapers. This suggests that bidders value the steel independently, although it is perceived that bidder valuations are evenly distributed between $6,000 and $28,000. You are the purchasing manager at CPT and are bidding on three tons of six-inch hot-rolled channel steel against 5 other bidders. Your company values the three tons of channel steel at $22,000. What is your optimal bid? Instruction: Enter your response rounded to the nearest penny (two decimal places). $

Answer 1

Since there aye 5 other bidelne = 6 1, 2, 1 phu One's own valuation is y= 22000 lower is most likely estimation is 2 = $6000 bid, Val optimal bid n c! le 22000 122000-6000) 6 5.22560 1.6606 i 6 = 22000 - 2666.67 = $19.333.33 & homestele