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Jack Byer is evaluating two sets of very similar suppliers. One set of suppliers, Storm Set is well established in a port city, but the

Jack Byer is evaluating two sets of very similar suppliers. One set of suppliers, Storm Set is well
established in a port city, but the port is hurricane susceptible, meaning there is a2% probability
of a super-event(a storm), but a unique event probability of only .3%. However, Inland Set
has a super-event probability of .5% and a unique event probability of .8%. Purchases cost
for Storm Set is $300,000 and $350,000 for Inland Set. However, any disruption will double the
cost to $600,000. and $700,000 respectively. Storm Set has 2 suppliers and Inland Set has 3
suppliers. Given these costs and probabilities which Set seems best?

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