In: Operations Management
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 | Philadelphia | New York |
Customer convenience | 0.25 | 70 | 80 |
Bank accessibility | 0.20 | 35 | 95 |
Computer support | 0.20 | 90 | 70 |
Rental costs | 0.15 | 95 | 55 |
Labor costs | 0.10 | 75 | 45 |
Taxes | 0.10 | 85 | 50 |
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.)
We will calculate overall weighted score for both cities.
Weighted score= Summation (Weights * Factor rating)
Weighted score (Philadelphia) = 0.25*70+0.20*35+0.20*90+0.15*95+0.10*75+0.10*85 =72.75
Weighted score (New York) = 0.25*80+0.20*95+0.20*70+0.15*55+0.10*45+0.10*50 =70.75
Hence,
Based on the given information, the best location for Northeastern Insurance Company to open the office is Philadelphia with a total weighted score of 72.75.