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From Chapter Five, slides 10 and 11,
we can take a look
at satisfying needs.
uh...
And looking at a weighted point system.
The problem here on 10, Pueblo, a southwestern chain of stores that sells
decorative accessories for the home,
is considering opening a store in New England. Three potential sites
are being evaluated for the new store. On the next slide, we see that they are
Boston, Massachusetts; Providence, Rhode Island; and Portland, Maine.
Each factor used in evaluating these sites
has been assigned to represent its relative importance
to the potential success of a store.
The three sites were than assigned points on a scale between 0 and a best possible
score of 100
to illustrate how well it scored with regard
to the particular factor.
Now, with this
we want to take a look,
using this table,
on slide eleven, to see which is the best weighted score.
Now, the factors we decided were important were construction cost,
operating costs,
traffic count,
convenient access. How easy is it to get in and out? Is it in a good place?
Are people around there? Would they have to drive there? Is it out in nowhere?
Parking area. What's the surrounding population?
Looking at this, we gave them a weight 0.10,
0.10, 0.30, 0.20, 0.20, 0.10.
If we add those up,
it should equal 1.0
Again, just like that Weighted Moving Average that we're looking at 100 percent,
or 1.0, giving each weight
a percentage of what that whole is going to be and how important
it is.
The higher
that weight is, the more important it is.
Now, traffic count
is something we want high.
It is shown that the more people that drive by, the more likely those whom just drive by
will just stop in.
So you want a higher traffic count. The higher
the score rated in the traffic count
means the more traffic there is.
uh...
Same with population. The bigger the population, the higher to score from 0
to 100 they're going to get.
But let's look at construction cost and operating costs.
Do you want high cost?
No.
So here we are actually looking at the lower the cost,
the higher the point is that it's going to be given.
So there's some reverse point-ages here that you need to take a look at,
highs and lows,
about what's going on. Is it that you want something that's high gets a high number
of points, or something that's low gets a high number of point saying that
it's better here on a score of 0 to 100.
And a cost, it is always going to be the lower
the cost the higher the points they will earn.
So when we got to figure this out,
we, literally,
take the weight
and we times it
to the score
that it received
and then, just like those
weighted averages we did before,
what we're going to do
is sum it up.
So I'm going to start with Boston, Mass
and I'm going to take the weights for each factor,
and multiply them
to
the scores for each factor that Boston got.
So we said that
on a score of 0 to 100, construction costs were about a 60.
They're not
really, really high or really, really low, but
it's about a 60,
which is really a subjective means
to find these scores.
If I take 0.10 times 60,
I find that that is 6.
Operating costs, Boston also scored a 60
and its weight is 1.0.
So again, multiplying that out, that's a 6.
Traffic count in Boston was very high. It was a good number
with the location we're looking at.
We gave it a 90, and we say that this is pretty important with a weight
of 0.30.
So 90 times 0.30 is 27.
Convenient access, we scored it at a 75.
It has a weight of 0.20
and multiply those together and you should get
15.
Parking area
at the site we're looking at earned a 60. Its weight is a 0.20.
So if I multiply those together, I should have a 12.
The surrounding population, we gave it a 70.
Its weight is 0.10 so that
is going to be a 7 after we multiply those together.
Now, to find the weighted score for
Boston, we just add these numbers together.
So 6 plus 6
plus 27
plus 15 plus 12
plus 7,
if I did my math right,
is a 73.
So the weighted score for Boston
is 73,
we now take these same weights
and we are going to apply them
to Providence, Rhode Island,
and we are going through the same process again
by multiplying them out.
So Providence, for construction cost, received 70 points
out of 100, the weight is
0.10
so that's going to be a 7.
It also received 70 points on operating cost,
with the weight of
0.10,
which is a 7 again multiplied out.
It received an 80
for the traffic count
with a weight of 0.30. Multiplying those should give us 24.
And it received an 80 for convenient access,
with the weight of a 0.20,
that should give us a 16.
Parking area
Providence, Rhode Island received a score of 75
and its weight
was 0.20, so that should give us
15.
And
surrounding population, Providence, Rhode Island received a score of 60 with a
weight of 0.10,
that should be a 6.
Again, I want to sum up these numbers
for Providence, Rhode Island's weighted score here.
So 7 plus 7
plus 24 plus 16 plus 15 plus 6.
I add them all together
and I should get 75
points for Providence, Rhode Island.
Using our weights again now,
let's go to our third site and multiply them out
to Portland, Maine.
Portland, Maine received 80 points for the construction cost
with the weight of 0.10. That's going to give us 8.
Operating costs also had 80 points in Portland, Maine,
and with a 0.10
it's 8.
Traffic count,
Portland received 70 points
and with a weight of 0.30 for this factor,
it's going to be 21.
Convenience access, Portland receive 70 points
with a weight
of 0.20,
that should give us
14.
Portland, Maine received 90 points
on the parking area
with a weight
of 0.20. That should give us 18 points,
and lastly the surrounding population with a weight of 0.10.
Portland, Maine receives 75 points
multiply the two together and I should have 7.5.
Summing these numbers up, 8
plus 8 plus 21
plus 14 plus 18 plus 7.5 and you're going to end up with
76.5.
Now, what do these weights mean?
Well, we took a look
by giving them a weighted factor
on what was most important, that being the traffic count at 0.30.
What was least important?
uh... construction cost, operating costs, and surrounding population all had the 0.10
But taking the points that
they've earned or,
subjectively, we said that
they rated at this 0 to 100
and adding them up,
given the weights,
Portland, Maine,
with
a weighted score of 76.5
has the best score, that should be a decimal point in there,
the best score,
the highest score, so it should
be where we want
to build.
It should be where we want to locate
because
it has the best score
given what we said was important.
That again, was Chapter 5,
slides 10
and 11.