Dusty Is Evaluating Three Bids to Supply Fence Hardware for the 5

Multiple Choice

Dusty is evaluating three bids to supply fence hardware for the 5 acres of pasture that need to be fenced. Breezy submits a bid of $40 per unit, Lady's bid is $50 per unit, and Spike's bid is $30 per unit. If a section of fence fails, it costs an average of $500 in losses and herding costs to round up all of the capybaras (giant rodents from South America - their leather makes fine gloves) . Dusty believes it will take 500 units to fence in this pasture configuration. What defect rates for the three suppliers would make Dusty indifferent among them from a total cost standpoint?

A) Breezy 5%, Spike 6%, Lady 2%
B) Breezy 3%, Spike 5%, Lady 1%
C) Breezy 1%, Spike 3%, Lady 2%
D) Breezy 2%, Spike 3%, Lady 4%