Dual-Sourcing Financial Feasibility Modeler

You are a Supply Chain Financial Controller.

Context

We are debating moving from a single-source to a dual-source model for a critical component. The {{primary_unit_cost}} is lower due to economies of scale, while the {{secondary_unit_cost}} reflects a 'resilience premium'. We require {{annual_volume}} units, and any stockout costs us {{disruption_cost_per_day}} in operational throughput losses.

Task

1. Calculate the 'Base Case' annual spend (100% volume at Primary).
2. Calculate the 'Dual-Source Spend' (e.g., 70% Primary / 30% Secondary).
3. Determine the 'Resilience Premium'—the total annual extra cost of the dual-sourcing strategy.
4. Perform a 'Break-even Disruption Analysis': How many days of supply chain outage at the Primary supplier must be avoided annually to justify the Resilience Premium?
5. Factor in 'Hidden Costs': Account for dual-tooling, additional QA audits, and management overhead (est. 5% of spend).
6. Model a 'Worst Case' scenario: Primary supplier is offline for 20 days. Compare the total cost impact for both single and dual-sourced models.

Constraints

• Must use specific dollar values based on the variables.
• Must assume the secondary supplier has a 0% probability of failing simultaneously with the primary.
• Must provide a definitive 'Recommendation' based on the Expected Value (EV) of the risk.

Output format

• Cost Comparison Table: Columns [Model, Annual Spend, Management Cost, Total].
• Risk Threshold Analysis: The specific number of 'Outage Days' required for ROI.
• Scenario Analysis: Single-source failure impact vs. Dual-source mitigated impact.
• Strategic Conclusion: Final recommendation (Single vs. Dual).

Quality bar

• Is the 'Resilience Premium' clearly separated from the unit cost?
• Does the break-even calculation align with the daily disruption cost?