Unit 8 Exercise 1. There are two supplier portfolio options available for Leonard Windows Hardware. The first option uses two local suppliers. Each supplier has a specific "unique-event" risk of 8%, and the probability of a "super-event" that could fail both at the same time is estimated to be 2.5%. The second option uses two suppliers located in different countries. Each has a "unique-event" risk of 18%, and the probability of a "super-event" that would disable both at the same time is estimated to be 1.2%. (a) What is the probability that both suppliers will be disrupted using the first option? (b) What is the probability that both suppliers will be disrupted using the second option? (c) Which option would provide the lowest risk of a total shutdown? 2. William's Window Hardware is looking for a new supplier for its casement window operators. William consider price and reputation as the most important criteria. He considers reputation to be four times more important than price. William has narrowed his choices to two suppliers. On a 10-point scale, he has assigned Rideau's Windows Supply a score of 9 on price and 4 on reputation. He has assigned lan and Family a score of 3 on price and 6 on reputation. Apply the factor weighting technique to help William choose a new window operator supplier. 3. Super Auto Company rented a warehouse in Halifax, NS to store its engines valued at $500,000. The engines need to be shipped to the Montreal, QC, plant. The annual holding cost rate for auto engine has been estimated at 15%. There are five shipping companies available. Their delivery time and costs are listed in the table below. Which carrier is most economical? Delivery Time Carrier (Days) Cost A 20 $500 B 15 $800 12 $1200 D 8 $1600 E 5 $2000