Bidding (Excel)

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					                     A                             B                  C               D            E            F         G         H          I        J         K         L
 1    Bidding Problem
 2
 3    Company's cost to prepare a bid                $350
 4    Company's cost to complete project           $10,000
 5
 6    Competitors' bids - triangularly distributed between a times company's cost
 7      and b times company's cost, with most likely value c times company's cost
 8                      a                                      1
 9                      c                                    1.3
10                      b                                      3
11
12    Simulation
13    Competitor                                           1                  2              3            4
14    Competitor's bid                         #NAME?              #NAME?           #NAME?       #NAME?
15
16    Outcomes for company
17                       Company's bid            Wins bid?     Company's profit
18                             No bid                                       $0
19                           $10,500               #NAME?         #NAME?
20                           $11,000               #NAME?         #NAME?
21                           $11,500               #NAME?         #NAME?
22                           $12,000               #NAME?         #NAME?
23                           $12,500               #NAME?         #NAME?
24                           $13,000               #NAME?         #NAME?
25                           $13,500               #NAME?         #NAME?
26                           $14,000               #NAME?         #NAME?
27                           $14,500               #NAME?         #NAME?
28                           $15,000               #NAME?         #NAME?
29
30    Summary measures from data table below
31                                                     No bid          $10,500        $11,000      $11,500    $12,000   $12,500   $13,000   $13,500   $14,000   $14,500   $15,000
32    Averages                                            $0             $140           $600         $940      $1,230    $1,400    $1,450    $1,400    $1,210    $1,000     $500
33    Stdevs                                              $0               $70          $219         $523       $819     $1,151    $1,477    $1,759    $1,961    $2,073    $1,888
34
35    Data table showing profits from various bids
36                           Replication           No bid             $10,500         $11,000       $11,500 $12,000 $12,500 $13,000 $13,500 $14,000 $14,500 $15,000
37                                                    $0           #NAME?           #NAME?       #NAME?      #NAME? #NAME? #NAME? #NAME? #NAME? #NAME? #NAME?
38                                     1              $0                $150            $650         $1,150   $1,650  $2,150   ($350)  ($350)  ($350)  ($350)  ($350)
39                                     2              $0                $150            $650         $1,150   $1,650  $2,150  $2,650  $3,150  $3,650  $4,150  $4,650
40                                     3              $0                $150            $650         $1,150    ($350)  ($350)  ($350)  ($350)  ($350)  ($350)  ($350)
41                                     4              $0                $150            $650         $1,150   $1,650  $2,150  $2,650  $3,150  $3,650  $4,150  $4,650
42                                     5              $0                $150            $650          ($350)   ($350)  ($350)  ($350)  ($350)  ($350)  ($350)  ($350)
43                                     6              $0                $150            $650         $1,150   $1,650  $2,150   ($350)  ($350)  ($350)  ($350)  ($350)
134                                   97              $0                $150            $650         $1,150   $1,650   ($350)  ($350)  ($350)  ($350)  ($350)  ($350)
135                                   98              $0                $150            $650         $1,150   $1,650  $2,150  $2,650   ($350)  ($350)  ($350)  ($350)
136                                   99              $0                $150            $650         $1,150   $1,650  $2,150  $2,650  $3,150   ($350)  ($350)  ($350)
137                                  100              $0                $150            $650         $1,150   $1,650  $2,150  $2,650  $3,150   ($350)  ($350)  ($350)
                                                                      Averages




                 $1,600




                 $1,400




                 $1,200




                 $1,000
Average Profit




                  $800




                  $600




                  $400




                  $200




                    $0
                          No bid   $10,500   $11,000   $11,500   $12,000    $12,500     $13,000   $13,500   $14,000   $14,500   $15,000

                                                                           Bid Amount




                                                                       Page 2
                                                                           StDevs




                     $2,500




                     $2,000




                     $1,500
Standard deviation




                     $1,000




                      $500




                        $0
                              No bid   $10,500   $11,000   $11,500   $12,000   $12,500    $13,000   $13,500   $14,000   $14,500   $15,000

                                                                                    Bid




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posted:3/21/2012
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