Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Bloom's Jeans is searching for new suppliers, and Debbie Bloom, the owner, has narrowed her choices to two sets. Debbie is very concerned about supply

image text in transcribed
image text in transcribed
Bloom's Jeans is searching for new suppliers, and Debbie Bloom, the owner, has narrowed her choices to two sets. Debbie is very concerned about supply disruptions, so she has chosen to use three suppliers no matter what. For option 1, the suppliers are wellestablished and located in the same country. Debbie calculates the "unique-event" risk for each of them to be 4%. She estimates the probability of a nationwide event that would knock out all three suppliers to be 2.5%. For option 2, the suppliers are newer but located in three different countries. Debbie calculates the "uniqueevent" risk for each of them to be 20%. She estimates the "super-event" probability that would knock out all three of these suppliers to be 0.4%. Purchasing and transportation costs would be $1,000,000 per year using option 1 and $1,010,000 per year using option 2. Atotal disruption would create an annualized loss of $500,000. a) The probability that all three suppliers will be disrupted using option 1 is D (round your response to ve decimal places)

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Hospitality Management Accounting

Authors: Martin G Jagels, Michael M Coltman

8th Edition

0471092223, 9780471092223

More Books

Students also viewed these General Management questions

Question

differentiate the function ( x + 1 ) / ( x ^ 3 + x - 6 )

Answered: 1 week ago

Question

1. What is the meaning of the information we are collecting?

Answered: 1 week ago

Question

3. How much information do we need to collect?

Answered: 1 week ago

Question

2. What types of information are we collecting?

Answered: 1 week ago