The book is not good at explaining or giving examples of these problems
( P.S : Answers are included in brainmass.doc file attached below. It took me a while to convert .cpy file to pdf format in order to see its content. )
2. Well the firm may win most of the biddings but if it cannot complete the projects it promised in time, the results can be disastrous. When we win the bid, we also win the smallest possible margin. Profits are generally elusive in the short term but the firm can sacrifice them in order to create a good reputation. When this reputation is established, the company can be able to try methods like reverse auction and can make buyers to bid for its specific projects rather then having many competitors. We may be bidding without knowing whether we are bidding to get the job or to intentionally be high and lose it. Thus we should appraise our financial status and estimate all the possible costs and the time required to finish these jobs successfully. Briefly winning 9 projects out of 10 is not an achievement if we cannot be able to predict whether we will have a shortage of resources or employees.
a. First of all the renter must know how long he/she is going to stay in that house. If this is known he can compare the owning expenses ...
Competitive bidding examples are provided.