Yamaha is determining whether to source a key component used in production of its jet boats from one or two suppliers. Managers have collected the following estimates. - The cost to manage a supplier is $165,000 per year. - If all suppliers are down, Yamaha will have to rush order parts from a competitor and this creates an annualized loss of $3.7 million per year. - The probability that any given supplier fails independently of the others (e.g. due to a quality problem) is 8.7% - The probability of a "super-event" that would knock out all of the potential suppliers (e.g. natural disaster or global pandemic) is 3.5% Draw a decision tree to determine the best sourcing strategy for Yamaha. - Calculate the probability that all suppliers fail for each strategy. - Find the expected cost associated with each strategy. Which strategy does Yamaha prefer, one supplier or two suppliers? Enter the absolute value of the difference between the expected costs for the two strategies. Rounding instructions: - Enter your final answer rounded to the nearest dollar. - It is important on this problem to carry the probability calculations to 5 decimal places because they are multiplied by large numbers in the millions that will compound rounding differences. - E.g. the calculation =5/7=0.714286 should be carried to at least 0.71429 not 0.71 nor 0.714