Supplier Dependency Loss
Estimate contingent business-interruption loss from supplier dependency.
Description
Supplier-dependency loss estimates a fraction of annual gross profit lost during a limited outage.
Supplier-dependency loss estimates a fraction of annual gross profit lost during a limited outage. Mitigation reduces that prorated amount.1
Estimate contingent business-interruption loss from supplier dependency.
When to use Supplier Dependency Loss
Use this tool to estimate contingent business-interruption loss from supplier dependency.
Prepare the supplied policy terms, dates, assumptions or recorded indicators requested. Keep monetary amounts on one currency basis and select the applicable thresholds separately.
How to use Supplier Dependency Loss and understand its results
- Prepare the supplied policy terms, dates, assumptions or recorded indicators requested. Keep monetary amounts on one currency basis and select the applicable thresholds separately.
- Enter annualGrossProfit, supplierDependencyPercent, outageDays, indemnityDays, mitigationPercent using the field table and calculation rules, then run the tool.
- Read coveredOutageDays, grossDependencyLoss, netDependencyLoss. The explanation below defines the units, signs, ordering and any flags or placeholder values.
- If the tool reports an input issue, correct the values and run it again. Apply the stated assumptions when interpreting a successfully returned result.
| Input field | Meaning | Value type; see rules below | Requirement |
|---|---|---|---|
| annualGrossProfit | Annual gross profit | number; minimum: 0 | Required |
| supplierDependencyPercent | Supplier dependency (%) | number; minimum: 0; maximum: 100 | Required |
| outageDays | Supplier outage (days) | number; minimum: 0 | Required |
| indemnityDays | Maximum indemnity period (days) | number; minimum: 0 | Required |
| mitigationPercent | Loss mitigation (%) | number; minimum: 0; maximum: 100 | Required |
Enter nonnegative profit/durations and dependency/mitigation percentages 0–100. Return covered days, gross dependency loss and gross×(1−mitigation/100) net loss.
coveredDays=min(outage,indemnity); gross=annualProfit×dependency/100×coveredDays/365 Units, indexing, boundary conditions and exceptional cases are defined in the calculation rules above.
| Output field | Meaning | Value type |
|---|---|---|
| coveredOutageDays | Covered outage days (days) | number; minimum: 0 |
| grossDependencyLoss | Gross dependency loss | number; minimum: 0 |
| netDependencyLoss | Net dependency loss | number; minimum: 0 |
{
"input": {
"annualGrossProfit": 365000,
"supplierDependencyPercent": 50,
"outageDays": 20,
"indemnityDays": 30,
"mitigationPercent": 20
},
"output": {
"coveredOutageDays": 20,
"grossDependencyLoss": 10000,
"netDependencyLoss": 8000
}
}Limitations and assumptions
Uses a fixed 365-day uniform-profit assumption. No seasonality, waiting period, supplier event or contingent-interruption policy is assessed.
Numeric inputs must be finite. Follow the calculation-specific rules for overflow, underflow and exceptional cases. Missing required fields, extra fields, wrong value types and violations of the calculation rules are input errors.
Alternative or Complementary methods
Use Nonappearance Loss: Estimate event nonappearance loss using caller-supplied dependency and mitigation. For a complementary task, use Trade-Credit Exposure: Estimate trade-credit portfolio exposure and covered expected loss.
References
-
Supplier Dependency Loss — tool.io
Similar or alternative tools
- Nonappearance Loss
Estimate event nonappearance loss using caller-supplied dependency and mitigation.
- Trade-Credit Exposure
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