Question

Your company wants to take advantage of the growing Asian market and plans to build a manufacturing facility in the southeast region to support the expansion. Management identified a set of critical factors to evaluate the prospective location, as shown in the table below; they used a rating system of 1 (least desirable) to 100 (most desirable) to evaluate each factor.
Factor Weight Rating Scale (1-100)
Taiwan Thailand Singapore Vietnam
Technology 0.15 85 95 40 30
Level of Education 0.15 85 20 95 20
Economic aspects 0.20 70 65 75 55
Social aspects 0.10 85 50 85 50
Political risk 0.40 30 70 70 60
The scores for the two best locations are approximately and respectively:_________
a) 47 and 30
b) 50 and 47
c) 71 and 63
d) 70 and 47
e) 85 and 72

Answer 1

Answer: c) 71 and 63

Explanation:

Country ratings based on weight and ratings scale;

Taiwan

= (0.15*85 + 0.15*85 + 0.2*70 + 0.1*85 + 0.4*30)

= (12.75 + 12.75 + 14 + 8.5 + 12)

= 60

Thailand

= (0.15*95 + 0.15*20 + 0.2*65 + 0.1*50 + 0.4*70)

= (14.25 + 3 + 13 + 5 + 28)

= 63.25

Singapore

= (0.15*40 + 0.15*95 + 0.2*75 + 0.1*85 + 0.4*70)

= (6 + 14.25 + 15 + 8.5 + 28)

= 71.75

Vietnam

= (0.15*30 + 0.15*20 + 0.2*55 + 0.1*50 + 0.4*60)

= 4.5 + 3 + 11 + 5 + 24

= 47.5

Best options would be Singapore followed by Thailand