Question: 1. What is the probability that both suppliers will be disrupted using option 1? 2. What is the probability that both suppliers will be disrupted

1. What is the probability that both suppliers will be disrupted using option 1?

2. What is the probability that both suppliers will be disrupted using option 2?

3. Which option provides the lowest risk?

Johnson Chemicals is considering two options for its supplier portfolio. Option 1 uses two local suppliers. Each has a "unique-event" risk of 4.5%, and the probability of a "super-event" that would disable both at the same time is estimated to be 1.3\%. Option 2 uses two suppliers located in different countries. Each has a "unique-event" risk of 12%, and the probability of a "super-event" that would disable both at the same time is estimated to be 0.24%

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