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Lambda Computer Products competed for and won a contract to produce two prototype units of a new type of computer that is based on optics using lasers rather than on electronic binary bits.
The first unit produced by Lambda took 5,000 hours to produce and required $250,000 worth of materials, equipment usage, supplies. The second unit took 3,500 hours and used $200,000 worth of materials, equipment usage and supplies. Labor is $30.00 per hour.
You were asked by your customer to present a bid for 10 additional units as soon as the second unit was completed. Production would start immediately. What would your bid be?
Suppose there was a significant delay between both contracts. During this time, personnel and equipment were reassigned to other projects. Explain how this would effect your your subsequent bid.
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