Answer to Question #25310 in Quantitative Methods for kenny syabunkululu

Question

a commpany is conidering whetjre it shud tender for two contracts (C1 andC2) on offer from a government depertment for the supply of certain componets.if tenders are submited, the company will have to provide extra facilities, the cost of which will have to be entirely recoup from the contract revenue. the risk of course is that if the tenders are unsuccesful then the company will have to writ off the cost of these facilities.
the extra facilities necessary to meet the requirements of contract C1 would cost $50,000. these facilities would, however, provide sufficient capacity for the requirements of contract C2 to be met also. in addition the production costs would be $18,000. the corresponding production costs for contract C2 would be $10,000
if a tender is made for contract C2 only, then the necessary extra facilities can be provided at a cost of $24,000. the production costs in this case would be $12,000
with the aid of a descion tree prepare a report advising the company

Answer 1

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