The Forsite Company is screening three ideas for new services. Resource constrai

Question

The Forsite Company is screening three ideas for new services. Resource constraints allow only one idea to be commercialized at the present time. The following estimates have been made for the five performance criteria that management believes to be most important Performance Criteriorn Capital equipment investment required Expected return on investment (ROI) Compatibility with current workforce skills Competitive advantage Compatibility with EPA requirements Rating Service B 0.9 0.3 0.1 0.6 0.7 Service C Service A 0.4 0.2 0.4 0.4 0.4 0.5 0.6 0.6 0.9 0.4 a. Calculate a total weighted score for each alternative. Use a preference matrix and assume e performance criterion. Let the total of the weights equal 100. (Enter your responses as integers) equal weights for each Service Total Weighted Score Enter your answer in the edit fields and then click Check Answer Clear All MacBook Ai esc : F1 F2 F3 F4 F5 F6

Explanation / Answer

Solution:

If five perfomance criteria has equal weights and total weight is 100 so for each performance criteria weight is (100/5) = 20.

So weighted average for Service A = (20*0.4)+(20*0.2)+(20*0.4)+(0.4*20)+(0.4*20) = 8+4+8+8+8 =36
Weighted average for Service B = (20*0.9)+(0.3*20)+(0.1*20)+(0.6*20)+(0.7*20) = 18+6+2+12+14 = 52
Weighted average for Service C = (20*0.5)+(20*0.6)+(20*0.6)+(20*0.9)+(20*0.4) = 10+12+12+18+8 = 60

So weighted average score for Service C is higher so Company should choose Idea C.

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