Question: A carpentry company has submitted tenders to produce trusses for two building projects. The company has just found out that it has won the first tender. This tender requires it to supply 220 trusses this month. The winner of the second tender will not be announced for another three months, but if they win the second tender, then they will need to produce 200 trusses for that project that are the same as the trusses for the first project. Both tenders involve them being paid $6000 per truss will cost the company $500000 to set up for a production run of the trusses, regardless of how many trusses it makes at that time, plus $4000 per truss. For this reason it is considering making all of the trusses in one run to save on the setup cost. If it decides to make all 420 trusses in a single run then it will also cost $60000 to store the second batch of trusses until they are needed for the second project (even if they do not win the tender). If it decides to only make 220 trusses in the first run then there will be no storage cost (and the second 200 trusses will not be made if they do not win the second tender) but the $500000 set up cost will need to be paid again if it does win the second tender. If they do not win the second tender then Acme will have to sell the extra trusses on the open market, where it expects to only get $2000 per truss. Acme believes that the probability that they will win the second tender is 0.48. Monetary values should be answered to the nearest dollar. Probabilities should be answered to three decimal places. Do not include dollar signs or commas.

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