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Consider the Disaster Risk Decision Tree Model

question 30

Essay

Consider the disaster risk decision tree model.
(a)Derive a formula to represent the amount that the probability of all suppliers being disrupted simultaneously,P(n),will increase if the super-event probability S is doubled.
(b)Test your formula by computing the amount of increase if the original S equals 1% and there are two suppliers,each with U = 4%.


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