1. Kenny runs a small wig manufacturing business in her New Port-Harcourt plant. With recent increase in global disruption, she is faced with the decision of selecting a supplier. She has a new found idea to select between a domestic supplier and oversea supplier of hair manufacturing products. The following data represent the cost Ms. Kenny will incur if she chooses either of the supplier.

Assume that both suppliers use similar resources at cost as follows and products supplied are identical and they sell 1,000 units at $400.00 each.

Table:1

Domestic Supplier	Oversea Supplier
Annual warehouse rental $20,000.00	Annual warehouse rental $20,000.00
Payment for material $27,000.00	Payment for material $15,000.00
Borrowed $300,000 @ 15% interest	Borrowed $300,000 @ 15% interest
Electricity, phone & internet services $3000.00	Electricity, phone & internet services $5000.00
Bought machine $185,000.00	Bought machine $185,000.00
Employs 4000 labor @ $25.00 per labor	Employs 2000 labor @ $30.00 per labor

Given the above information in table 1 above, if the domestic supplier has a failure probability of .025 to deliver the product:

What is the expected value of her profit?

What is the variance of Ms. Kenny if she chooses this local supplier?

What is the variance of her profit?

Based on your calculations, which supplier would you recommend for Ms. Kenny to do business with. Moreover, why? EXPLAIN.