a) The probability that both suppliers will be disrupted using option 1 is

(round your response to five decimal places).

Part 3

b) The probability that both suppliers will be disrupted using option 2 is

(round your response to five decimal places).

c)

Option 1

provides the lowest risk of a total shutdown.

Johnson Chemicals is considering two options for its supplier portfolio. Option 1 uses two local suppliers. Each has a "unique-event" risk of 4.5%, and the probability of a "super-event" that would disable both at the same time is estimated to be 1.3%. Option 2 uses two suppliers located in different countries. Each has a "unique-event" risk of 14%, and the probability of a "super-event" that would disable both at the same time is estimated to be 0.24%. a) The probability that both suppliers will be disrupted using option 1 is (round your response to five decimal places)