Question

Marilyn Helm Retailers is attempting to decide on a location for a new retail outlet. At the​ moment, the firm has three​ alternatives: stay where it is but enlarge the​ facility; locate along the main street in nearby Newbury​; or locate in a new shopping mall in Hyde Park.

The company has selected the four factors listed in the following table as the basis for evaluation and has assigned weights as​ shown:

                                                                                                                                                                               

Factor	Factor Description	Weight	Present LocationPresent Location	NewburyNewbury	Hyde ParkHyde Park
1	Average community income	0.400.40	3535	5555	5050
2	Community growth potential	0.150.15	1515	2525	8080
3	Availability of public transportation	0.200.20	2525	5555	5555
4	Labor​ availability, attitude, and cost	0.250.25	8585	5555	4545

​a) Based on the given​ information, the best location for Marilyn Helm Retailers is to open the new retail outlet in _____, with a total weighted score of_____​(Enter your response rounded to two decimal​ places.)

​b) A new subway station is scheduled to open across the street from the present location in about a​ month, so its third factor score should be raised to 75. Then, the best location for Marilyn Helm Retailers is to open the new retail outlet in ______, with a total weighted score of ____.(Enter your response rounded to two decimal​places.)

Answer 1

a)

The total weighted score for a location is calculated by multiplying the factor weights with the respective location score and then adding them .The location with the highest total weighted score is then choose

Total weighted score = summation of (factor weights X location score)

Therefore,

Total weighted score for present location = (0.40X35) + (0.15X15) + (0.20X25) + (0.25X85)

= 14+2.25+5+21.25

=42.5

Total weighted score for Newbury = (0.40X55) + (0.15X25) + (0.20X55) + (0.25X55)

= 22+3.75+11+13.75

=50.5

Total weighted score for Hyde Park = (0.40X50) + (0.15X80) + (0.20X55) + (0.25X45)

= 20+12+10+11+11.25

= 53.25

Therefore, the best location to open the new retail outlet is Hyde Park, with a total weighted score of 53.25

b)

When the third factor score for the present location is raised to 40, the new Total weighted score for the present location is = (0.40X35) + (0.15X15) + (0.20X75) + (0.25X85)

= 14+2.25+15+21.25

=52.5

The best location to open the new retail outlet is still Hyde park with a total weighted score of 53.25. Because after the change also this location has the highest total weighted score.