Question: The manager should use 2 suppliers ( option b ) to minimize the overall risk and cost. With a 5 % probability of a super

The manager should use 2 suppliers (option b) to minimize the overall risk and cost. With a 5% probability of a super-event affecting all suppliers simultaneously, having two suppliers reduces the likelihood of complete disruption. Additionally, the 10% probability of a unique event affecting one supplier can be better managed with multiple suppliers in place. The cost of managing two suppliers is justified to mitigate the potential $2,000,000 financial cost of total disruption. This balanced approach optimizes risk mitigation and cost-effectiveness.

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