Bill Johnson, a small business owner (Holiday Imports) imports holiday merchandise from China and resells the items. He realizes that he needs to analyze his supply chain for improvements, but does not know where to begin and has asked you for your ideas. You begin by considering the following four issues: • Evaluating disaster risk in the supply chain • Supplier Evaluation • Bullwhip Effect • Transportation Mode Analysis The business owner hires you to assist with deciding on potential changes in these areas. The first decision to consider is the number of suppliers to include within his supply chain. You decide to look at risk first to determine how many suppliers are optimal. Problem #1 – Evaluate between one, two, and three supplier approaches. Evaluation data given below is based on historical data, climate forecasts, and geological forecasts. S = Probability of a “super-event” negatively impacting all suppliers simultaneously to be 0.3% (i.e. probability = 0.003) U = Probability of a unique event impacting any one of the suppliers to be 6% (i.e. probability = 0.06) C = Marginal cost of managing an additional supplier = $10,000 L = Financial loss incurred if a disaster caused all suppliers to be down simultaneously is $1,000,000 How many suppliers should Holiday Imports utilize in the supply chain based on the information above? Problem #2 is attached with the files. Problem #3 – The owner now wants to analyze whether or not his ordering pattern is contributing to a bullwhip effect or not. Over the past ten weeks, demand for Fourth of July decorations has been: 210, 100, 190, 180, 220, 200, 215, 198, 225, 231. The owner has placed the following orders over the same ten weeks: 200, 150, 190, 150, 180, 250, 200, 180, 210, 250. Using the Bullwhip Metric, assess whether or not the owners ordering pattern has contributed to a bullwhip effect or not. Remember, if the metric is > 1, then the ordering pattern is contributing to a bullwhip effect. Hint – you can use Excel to find the variance of the sample datasets by using the VAR.S function. Problem #4 – The final portion of your analysis concerns transportation mode and analyzing holding cost versus shipping options. To begin tranporting a new product, the owner needs to determine whether or not he should incur the extra cost of expedited shipping and save holding cost or use slower shipping modes and pay the holding cost. The value of the shipments is $17,690. To store the merchandise, the holding cost of the merchandise is 35% of the shipment value. An airfreight carrier can ship the products five days faster than slower transportation modes, but the extra cost is $180.00. Using transportation mode analysis, determine if the owner should pay the additional money for expedited shipping or use slower shipping and warehouse the merchandise. Calculate the savings for the choice selected.