Question

Your company wants to take advantage of the growing Asian market and plans to build a manufacturing facility in the southeast region to support the expansion. Management identified a set of critical factors to evaluate the prospective location, as shown in the table below; they used a rating system of 1 (least desirable) to 100 (most desirable) to evaluate each factor.

Factor	Weight	Rating Scale (1-100)
		Taiwan	Thailand	Singapore
Technology	0.15	85	95	40
Level of Education	0.15	85	20	95
Economic aspects	0.20	70	65	75
Social aspects	0.10	85	50	85
Political risk	0.40	30	70	70

First, identify which location you would recommend based on the current scores shown in the table.

If political unrest broke out in Singapore, lowering the political risk score for that location to 30, would this change your original conclusion? Indicate your original and updated recommendation, respectively, based exclusively on the multi-criteria scores.

Singapore and Thailand Thailand and Singapore Taiwan and Taiwan Thailand and Taiwan Singapore and Singapore

Answer 1

Factor	Weight	Raw score			Weighted score
		Taiwan	Thailand	Singapore	Taiwan	Thailand	Singapore
Technology	0.15	85	95	40	12.75	14.25	6.00
Level of Education	0.15	85	20	95	12.75	3.00	14.25
Economic aspects	0.20	70	65	75	14.00	13.00	15.00
Social aspects	0.10	85	50	85	8.50	5.00	8.50
Political risk	0.40	30	70	70	12.00	28.00	28.00
Total weighted score =					60.00	63.25	71.75

So,

Based on the total weighted score, the best location is Singapore.

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When the political risk changes to 30:

The weighted score of Singapore becomes = Earlier score - (70 - 30)*weight of political risk = 71.75 - (70 - 30)*0.4 = 55.75

So, now, Thailand becomes the preferred location with the highest weighted score of 63.25