There are instances when we need to evaluate various alternatives and select the best one. For example, when a
The factor-rating method is a useful tool to help us make decision. It involves six steps:
- Develop a list of relevant factors which affect our choice.
- Assign a weight to each factor to reflect its relative importance.
- Develop a scale for each factor, e.g. 1 to 10 or 1 to 100 points.
- Determine the score of each factor using the scale in step 3.
- Multiply the score by the weights for each factor and total the score for each alternative.
- Make a decision based on the maximum point score.
I wanted to buy a new car. Based on my budget, I narrowed down my choices to Honda City and Toyota Vios. I then applied the factor-rating method to evaluate each of these cars. The scores are given in the following table:
(Click to enlarge:)
As you would expect, I bought the City.
Jay Heizer & Barry Render, “Operations Management”, 8th edition