Question: Global Computer, a computer manufacturer with a global supply chain, is adding a new supplier for some of its component parts, and the suppliers it
Global Computer, a computer manufacturer with a global supply chain, is adding a new supplier for some of its component parts, and the suppliers its considering are in China, India, Thailand, and Vietnam. As a part of its risk management program, Global Computer wants to assess the possible impact of a supplier shutdown in the event of a natural disaster, such as a flood, fire, an earthquake. The following payoff table summarizes its profits in millions of dollars for supplier shutdowns given three different levels of event severity.
Supplier country Low severity Moderate severity High severity
China $ $$
India $ $$
Thailand $ $$
Vietnam $ $$
Find the best option by
a Maximax payoff
b Maximin payoff
c Minimax regret
For more thorough planning, they hired a consultant, and the consultant forecasted the probability of moderate severity as and the probability of high severity as Which location should be the best option?
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