Question 4
Foxcomp, an electronics and computer manufacturer with a globalsupply chain, wants to add a new supplier for some of its componentparts, and the suppliers it's considering are in Taiwan, India,Thailand, the Philippines. As part of its risk management program,Foxcomp wants to assess the possible impact of a supplier shutdownin the event of a natural disaster, such a flood, fire, tsunami, oran earthquake. The following payoff table summarizes the losses (inmillions of dollars) for an extended supplier shutdown, givendifferent levels of event severity and recovery in eachcountry.
| Event Severity |
| Low | Moderate | Normal |
Taiwan | $15 | $19 | $23 |
India | 7 | 10 | 20 |
Thailand | 12 | 15 | 19 |
Philippines | 6 | 9 | 25 |
probability | 0.42 | 0.35 | 0.23 |
- Determine the best decision using each of the followingcriteria.
- Minimim
- Minimax
- Minimax Regret (You need to create an opportunity losstable)
- Determine the best decision using expected value.
- Determine the expected value of perfect information(EVPI).
