Question

In: Operations Management

Northeastern Insurance Company is considering opening an office in the U.S. The two cities under consideration...

Northeastern Insurance Company is considering opening an office in the U.S. The two cities under consideration are

Philadelphia and New York.

The factor ratings​ (higher scores are​ better) for the two cities are given in the following table.

                                                                                                        

Factor

Weight

PhiladelphiaPhiladelphia

New YorkNew York

Customer convenience

0.25

75

75

Bank accessibility

0.20

40

85

Computer support

0.20

90

70

Rental costs

0.15

85

50

Labor costs

0.10

80

50

Taxes

0.10

90

55

Based on the given​ information, the best location for Northeastern Insurance Company to open the office is

____________

with a total weighted score of

___________.

​(Enter your response rounded to two decimal​ places.)

Solutions

Expert Solution

Total weighted score of Philadelphia = (0.25*75 + 0.2*40 + 0.2*90 + 0.15*85 + 0.1*80 + 0.1*90)

= (18.75 + 8 + 18 + 12.75 + 8 + 9)

= 74.5

Total weighted score of New York = (0.25*75 + 0.2*85 + 0.2*70 + 0.15*50 + 0.1*50 + 0.1*55)

= (18.75 + 17 + 14 + 7.5 + 5 + 5.5)

= 67.75

Based on the given​ information, the best location for Northeastern Insurance Company to open the office is Philadelphia with a total weighted score of 74.5


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