Whether the likelihood of choosing more suppliers increase or decrease when the probability of super-event risk decrease. Introduction: Unique-event Risk: In unique-event risk, the disruption occurs to only one supplier. When such phenomenon occurs, one supplier can be chosen over other suppliers. Selection of more than one supplier is necessary to overcome unique-event risk. Super-event Risk: The disruption rate to suppliers is high in super-event risk because all suppliers are affected in super-event risk. Chances for occurrence of super-event risks are very low. However firms must make proactive arrangement to overcome super-event risks.

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Chapter 11.S, Problem 3DQ

Summary Introduction

To determine: Whether the likelihood of choosing more suppliers increase or decrease when the probability of super-event risk decrease.

Introduction:

Unique-event Risk:

In unique-event risk, the disruption occurs to only one supplier. When such phenomenon occurs, one supplier can be chosen over other suppliers. Selection of more than one supplier is necessary to overcome unique-event risk.

Super-event Risk:

The disruption rate to suppliers is high in super-event risk because all suppliers are affected in super-event risk. Chances for occurrence of super-event risks are very low. However firms must make proactive arrangement to overcome super-event risks.

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