Fernando Garza\'s firm wishes to use factor rating to help select an outsourcing

Question

Fernando Garza's firm wishes to use factor rating to help select an outsourcing provider of logistics services a) With weights from 1 - 5 (5 being the highest) and ratings from 1 - 100 (100 being the highest), use the following table to help Garza make his decision In the following table, compute the weighted average score for each of the three companies (enter your responses rounded to one decimal place) Weight Overnight Worldwide United Criterion Quality Delivery Cost Shippin 86 74 67 Delive 85 81 82 Freight 79 72 2 Weighted average score

Explanation / Answer

In order to calculate weighted average we need to use the formula

WA = ?wixi / ?wi

Here WA is the weighted average

Using the formula the weighted average for

Overnight shipping

( 5*86 + 3*74 + 2*67 ) / (5+3+2) = 786/10 = 78.6

Worldwide delivery

( 5*85 + 3*81 + 2*82 ) / (5+3+2) = 832/10 = 83.2

United freight

( 5*79 + 3*72 + 2*99 ) / (5+3+2) = 809/10 = 80.9

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