Atlanta Appliances produces all of its products in one gigantic production facility near an earthquake fault line. Atlanta Appliances is the classic example of a firm that should use self-insurance to manage its risks.

Question

Quizplus · Accepted Answer

Since a major fire or earthquake could destroy Atlanta Appliances' entire production capacity, self-insurance would be very risky. A firm that had more dispersed facilities would be a better candidate for self-insurance.

Atlanta Appliances Produces All of Its Products in One Gigantic