The cable company CC is bidding for the one year financial service contract to a large brokerage house.
The service would include data base services and network services.
The cost of data base services is most likely to be $450K, but could go as high as $500K, or as low as $250K.
The network services are even harder to estimate. However, during previous projects similar type of networks
were provided at the following costs:.
Network Costs in thousands of $.
1	$320
2	$323
3	$298
4	$387
5	$346
6	$316
7	$326
8	$394
There is only one competitor Globtel, and it is estimated that their bids for such projects have normal distribution
with mean $900K and standard deviation $50K.
networks cost		bid by Globtel
data base cost		bid by CC		profit
a) CC is considering a bid of $950K. Simulate this bid. Comment on this bid. What is the likelihood of having a loss.
b) Run sensitivity analysis with the following CC bid values (in thousands of $):
$800	$850	$900	$950	$1,000
What can you conclude from your results? Advice on the bidding amount. Justify your answer.