Question

Still concerned about the risk in Problem S11.2, suppose that Phillip is willing to use one local supplier and up to two more located in other territories within the country. This would reduce the probability of a “super- event” to 0.5%, but due to increased distance the annual costs for managing each of the distant suppliers would be $ 25,000 (still $ 15,000 for the local supplier). Assuming that the local supplier would be the first one chosen, how many suppliers should Witt Input Devices use now?



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  • CreatedMarch 20, 2014
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