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What disruption exposure would justify a second source?

Compare probability-weighted disruption reduction with supplier premiums and qualification costs.

Example scenario

Editable demonstration inputs, not verified industry benchmarks. Enable JavaScript to calculate your own scenario.

Annual disruption probability
15 %
Contribution & recovery cost if disruption occurs
$1,500,000
Loss avoided by qualified second source
70 %
Annual dual-source purchasing premium
$60,000
One-time qualification cost
$80,000
First-year expected resilience value$17,500

Example result only, not a forecast or promise.

Expected annual loss avoided
$157,500
Steady-state expected net benefit
$97,500
First-year break-even disruption probability
13.3%

What to do with this result

Test correlated failures and the second source’s real surge capacity; expected value does not describe worst-case liquidity needs.

Know what is inside the model.

Planning model, not personalized financial advice. Your inputs remain in your browser.

Calculation method

Expected avoided loss = annual disruption probability × conditional loss × mitigated share. First-year net = avoided expected loss − premium − qualification.

Assumptions and limitations

  • Example inputs are editable scenarios, not Aryo results or independently verified industry benchmarks.
  • Demand, lead times and service levels are scenario inputs. Validate variability, physical constraints and supplier terms before ordering.

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