Question

Dusty is evaluating two bids to supply fence hardware for the 5 acres of pasture that need to be fenced. Breezy submits a bid of​ $40 per unit with a defect rate of​ 3%; Lady's bid is​ $50 per unit and their product manager estimates the defect rate to be around​ 0.5%. If a section of fence​ fails, it costs an average of​ $500 in losses and herding costs to round up all of the capybaras. Dusty believes it will take 500 units to fence in this pasture configuration. The product​ manager's uncertainty has Dusty​concerned; what defect rate for Lady would make Dusty indifferent between the two suppliers as far as total cost is​ concerned?

please help me answer this supply chain problem! i will rate! thanks!

Answer 1