Mark Zuckerberg, is the owner of a well-known audio systems manufacturer. He wants to create a...

 

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Mark Zuckerberg, is the owner of a well-known audio systems manufacturer. He wants to create a portfolio of suppliers for some of the electronics used in production. Based on historical data and climate and geological forecasts, he estimates the probability of a "super- event" that would negatively impact all suppliers simultaneously to be 2.5% during the supply cycle. He further estimates the "unique- event risk for any of the potential suppliers to be 4%. The marginal cost of managing an additional supplier is $3 thousand dollars, and the financial loss incurred if a disaster caused all suppliers to be down simultaneously is $20 million dollars. How many suppliers should he use? Assume that up to 3 nearly identical suppliers are available. (Do not round your intermediate calculations. Only enter a number. For ex:3. @orsdemir, Copyrighted content. Cannot be posted.) Mark Zuckerberg, is the owner of a well-known audio systems manufacturer. He wants to create a portfolio of suppliers for some of the electronics used in production. Based on historical data and climate and geological forecasts, he estimates the probability of a "super- event" that would negatively impact all suppliers simultaneously to be 2.5% during the supply cycle. He further estimates the "unique- event risk for any of the potential suppliers to be 4%. The marginal cost of managing an additional supplier is $3 thousand dollars, and the financial loss incurred if a disaster caused all suppliers to be down simultaneously is $20 million dollars. How many suppliers should he use? Assume that up to 3 nearly identical suppliers are available. (Do not round your intermediate calculations. Only enter a number. For ex:3. @orsdemir, Copyrighted content. Cannot be posted.)

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