Read the scenario below and answer the questions that follow. Scenario: You are estimating a reasonable price for an office light fixture requirements contract. There has been a requirements contract awarded for a contractor to supply this fixture in each of the past five years. Each year the estimated quantity has been approximately 10,000 units. Using this price history and available index numbers, estimate a reasonable unit price for the fixture.

1. How can you use this information to estimate a reasonable price? 2. What is your estimate of a reasonable price? 3. Now what is your reasonable estimate?

PRICE OF OFFICE LIGHT FIXTURE PER YEAR Year Contract Unit Price Index Number Price in 2X12 Dollars 20X7 $21.50 109.9 20X8 $21.35 108.8 20X9 $22,40 114.2 2X10 $23.75 121.2 2X11 $24.90 127 2X12 133. Index numbers are from the Producer Price Index for this class of items