Question

A building contractor is preparing a bid an new construction project. Two other contractors will be submitting bids for the same project. Based on past bidding practices, bids from the other contractors can be described by the following probability distributlons: Contractor Probability Distribution Bid A Uniform probability distribution between $600,000 and $800,000 mean bid of $700,000 and a Normal probablity distributlon with standard deviation of $50,000 If required, round your answers to three decimal places. simulate 1,000 trials of the contract bidding a. If the building contractor submits process bid $750,000, what is the probability that the building contractor will obtain the bid? Use an Excel worksheet The probability of winning the bid of $750,000 b. The building contractor recommend? Repeat the simulation process with bids of $775.000 and $785.000 to iustify your recommendation. s also considering bids of 775,000 and $785,000. If the building contractor would like to bid such that the probability of winning the bid is about 0.8, what bid would you The probability of winning the bid of $775,000 The probability of winning the bid of $785,000 The reccomendation would be to choose the bid of s 750000 775000 785000

Answer 1

olution: a) Sdng data: contractty A (tinform Distmbutor) $600,000 Imoltest value .4 8,00,000 value torgest cortYoctoy (Nomal DEmbutor) Mean 1 DO 000 Standand deviation - 50,000 copy the ceIs foT the frtst tral! docon unti t,000 troils poduced Note your value il be different becausL RAND PICK9 a rardom nmer imulationtYaflS- Hohest Bid PTai ContToctor A $130,623 S6 $730,623 56 $102,S18 10 $T40,56196 $731, 305 22 $ 740, 561. 96 TOO, 2037 753, 612. 21 $753,612.2 9 602924.39 $687, 290-81 99 $68 7,290 87 000 $734,521. 43 851, 102.7 ş 85, 102. To es hmate the Poobabiltty of uainnng the bid use coVNIf uncao to Count the nurmber q maximum bide less than $75,00000 Then eatimatr be probabiliky ef winnin dnve the nomber by 1,000 Contractors bld Number a wing wnnna $a,000 629 0.629 The probab?ity of coining the bid oc $7,50,000 7 62.94

(b) TO estnate tha pability q wrmrg tre bd use courTIR frxton numbe of moimun bids fess than 175.000 ard to count e Tren drivede that number bboo 0 to eira the peobability op annr po bobility contractors Bid Numcer o LOins 10 629 629 750,000 TO-819 9375,000 B86 $Te5 000 922-9 The proboblity q uirng the bid o 7,75,000 0819 7.25,000-0886 The probabl:tg of. onning the bd of The recommord ation oUld the choose the bid of $ 000 SLL