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In the context of supply chain risk, probabilistic simulation and modeling is a supplier location-based analysis of high-risk and consequence nodes based on maximum loss value or revenue at risk. Success of this approach depends on clearly articulated end goals/objectives, expected outcomes and application of results, reliable probability data, and well understood impact and severity scenarios. It is a SCRM best practice limited to direct manufacturing and/or outsourced manufacturing locations, and typically recommended for sophisticated practitioners of stochastic simulations.

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