Question

Rao Technologies, a California-based high-tech manufacturer, is considering outsourcing some of its electronics production. Four firms have responded to its request for bids, and CEO Mohan Rao has started to perform an analysis on the scores his OM team has entered in the table below. RATINGS OF OUTSOURCE PROVIDERS FACTOR WEIGHT A B C D Labor w 5 4 3 5 Quality procedures 30 2 3 5 1 Logistics system 5 3 4 3 5 Price 25 5 3 4 4 Trustworthiness 5 3 2 3 5 Technology in place 15 2 5 4 4 Management team 15 5 4 2 1 Weights are on a scale from 1 through 30, and the outsourcing provider scores are on a scale of 1 through 5. The weight for the labor factor is shown as a w because Rao’s OM team cannot agree on a value for this weight. For what range of values of w, if any, is company C a recommended outsourcing provider, according to the factor-rating method? Please show work. Thank you

Answer 1

Solution:

The weighted score for all the options are the sum product of the weights and the respective scores for each criterion, as shown in the picture below.

Now for C to be larger let us calculate the values of w at which C will be have equal to other options:
C = A :
370+3w = 320+5w ,
So w = 25 ,
Hence C will be greater than A for W = 0 to 25
C = B :
370+3w = 330+4w ,
So w = 40 ,
Hence C will be greater than B for W = 0 to 40
C = D :
370+3w = 255+5w ,
So w = 57.5 ,
Hence C will be greater than A for W = 0 to 57.5
Now the range for which C will be better than all the other three options will be the overlap(intersection) of the above range.
Hence the range for which C is the best is 0 to 25

Thank you,
Please rate up the answer (comment if rate down or found anything inappropriate). Thank you!!