Ch12Q13

CPT incorporated is a local manufacturer of conveyor systems. Last year, CPT sold over $2 million worth of conveyor systems that notted the compony $100,000 in profite paw matcrials and labor are Cors bimgest exnenses Snending on structural steel alone amounted to over $500,000, or 25 percent of total soles. In an effort to reduce costs, CPT now uses an online procurement procedure that is best described as a tirst-price, sealed-bid auction. The bidders in these auctions utilize the steel for a wide var iety of purposes. ranging from art to skyscrapers. This suggests thot bidders value the steel independently, although it is percelved that bidder valuations are evenly distributed between $7,000 and $26,000. You are the purchasing manager at CPT and are bidding on three tons of six-inch hot-folled channel steel against four other bidders. Your company values the three tons of channel steel at $18,000. What is your optimal bid