Alctrex Construction Company is bidding against Betatrex for a building project. Due to past performance of both

Question:

Alctrex Construction Company is bidding against Betatrex for a building project. Due to past performance of both companies, Alctrex knows that if the company bids a lower or an equal amount, it will win the bid. It will cost Alctrex \(\$ 9,500\) to complete the project. Betatrex's bid is a random variable \(B\) with the following probabilities:

\[ \begin{aligned} & P(B=\$ 9,500)=0.45 \\ & P(B=\$ 10,500)=0.35 \\ & P(B=\$ 12,000)=0.20 \end{aligned} \]

Suppose that Alctrex is thinking of bidding between \(\$ 9,500\) and \(\$ 12,000\) in increments of \(\$ 500\). Determine the profit matrix for Alctrex. What is the best decision for the company? What is the value of perfect information?

Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Related Book For  book-img-for-question
Question Posted: