Two construction companies are bidding against one another for the right to construct a new community center building in Bloomington, Indiana. The first construction company, Fine Line Homes, believes that its competitor, Buffalo Valley Construction, will place a bid for this project according to the distribution shown in the file P09_44.xlsx. Furthermore, Fine Line Homes estimates that it will cost $160,000 for its own company to construct this building. Given its fine reputation and long-standing service within the local community, Fine Line Homes believes that it will likely be awarded the project in the event that it and Buffalo Valley Construction submit exactly the same bids. Create a payoff table that lists the profit from each Fine Line bid and each competing bid, and use it to find the bid that maximizes Fine Line’s expected profit. Why is this an easier approach than a decision tree for this particular problem?
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