The GATE Grind

GATE 2021 CE (CE1) – Question 40

Construction Management · Types of construction projects, estimation and costing, analysis of rates · 2 marks · Multiple choice

Past ratios of Y’s bid price to X’s cost are 1.02,1.04,1.06,1.10,1.12 with frequencies 6,12,3,6,3. Based on these 30 bids, X’s probability of beating Y at 8% markup is

  1. 0%
  2. more than 0% but less than 50%
  3. more than 50% but less than 100%
  4. 100%

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Show answer and explanation

Correct answer: (B) more than 0% but less than 50%

Explanation

At 8% markup on cost, X bids 1.08 times cost. It wins when Y’s ratio exceeds 1.08, which occurs for the 1.10 and 1.12 groups. The empirical probability is $(6+3)/30=0.30$, falling **between 0% and 50% (B)**.