question archive Your company, which provides bookkeeping-related services to municipalities and small businesses, is about to bid on a five-year contract to provide payroll services to a large suburban school district
Your company, which provides bookkeeping-related services to municipalities and small businesses, is about to bid on a five-year contract to provide payroll services to a large suburban school district
Subject:MathPrice: Bought3
Your company, which provides bookkeeping-related services to municipalities and small businesses, is about to bid on a five-year contract to provide payroll services to a large suburban school district. Your past data indicates that the average bidder for this type of contract will submit a bid higher than a relative bid of 1.10 about 80 percent of the time.
(a) Say you are bidding for this contract against five average bidders. What is your probability of winning the contract with a relative bid of 1.10? 13 - 12
(b) After you calculated the probability described in Part (a), you find out that one of the five bidders you will be bidding against is the aggressive new company, Compu-Pay. You estimate that Compu-Pay will bid higher than a relative bid of 1.10 only 40 percent of the time. Now that you know you are bidding against Compu-Pay and four average bidders, what is your probability of winning the contract with a relative bid of 1.10? Explain why this probability is different from the probability you calculated in Part (a).
