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Telecomp, a computer manufacturer with a global supply chain, is adding a new supplier for some of its component parts, and the suppliers it's considering
Telecomp, a computer manufacturer with a global supply chain, is adding a new supplier for some of its component parts, and the suppliers it's considering are in China, India, Thailand, and the Philippines. As part of its risk management program Telecomp wants to assess the possible impact of a supplier shutdown in the event of a natural disaster, such as a flood, fire, or an earthquake. The following payoff table summarizes Telecomp's losses in millions of dollars for supplier shutdowns given different levels of event severity.
Losses $ arising from different severity of supplier shutdow ns
tableLevel of SeveritySupplier Location,Mild,Average,SevereChinaIndiaThailandPhilippines
Determ ine the best decision using each of the following criteria.
a Minim in
b Minimax
c Equal likelihood
marks
d Hurwicz
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