GM is determining whether to source microchips used in production of its vehicles from one or two suppliers. Managers have collected the following estimates. The probability that any given supplier fails independently of the others (e.g. due to a quality problem or labor strike) is 5.0% The probability of a "super-event" that would knock out all of the potential suppliers (e.g. natural disaster or global pandemic) is 1.5% If all suppliers are down, GM will not be able to meet its orders and this creates an annualized loss of $4.0 million per year. The cost to manage a supplier is $104,000 per year