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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
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.