1.An apparel company would like to create a portfolio of local suppliers for its new line of dresses. As the suppliers all reside in a location prone to flooding and earthquakes, the company believes that the probability of a "super-event" that might shut down all suppliers at the same time for at least 2 weeks is 0.3%. Such a shutdown would cost the company approximately $2,000,000. The company estimates the "unique-event" risk for any of the suppliers to be 7%. Assuming that the marginal cost of managing an additional supplier is $15,000 per year, how many suppliers should the company use? Assume that up to three nearly identical local suppliers are available.

2. The order size in a store is 250 units each time an order is placed. The daily demand is normally distributed, with a mean of 20 units and a standard deviation