Question

A manager has received an analysis of several cities being considered for a new office complex. The data (10 points maximum) are as follows: Location Score Factor A B C Business services 9 5 5 Community services 7 6 7 Real estate cost 3 8 7 Construction costs 5 6 5 Cost of living 4 7 8 Taxes 5 5 4 Transportation 6 7 8 a. If the manager weights the factors equally, how would the locations stack up in terms of their composite factor rating scores? A / 7 B / 7 C / 7 Thus, is the best. b. If business services and construction costs are given weights that are double the weights of the other factors, how would the locations stack up? A / 9 B / 9 C / 9 Thus, is best and is least desirable

Answer 1

Answer:

a) If manager weighs factors equally, the composite factor rating scores will be A = 5.6, B = 6.3, and C = 6.3 approximately.  B and C are equal and better than A in terms of highest average score.

b) When double weights are assigned to business services and construction costs, the composite factor rating scores will be A = 5.9, B = 6.1, and C = 6.0 approximately.  B is the best in terms of highest average score.

Explanation:

Composite Factor Rating scores are obtained by obtaining the mean or average of the scores under each location in order to give data points that can be used for making decisions.

The assignment of weights will differentiate the factors and change the decision outcome.

An excel copy is attached showing the derivations for a and b.

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