Assumed Certainty: Multi-Attribute Decision Making (MADM)
Scenario: You are the Vice President of Franchise Services
for the Lucky restaurant chain. You have been assigned the task of evaluating
the best location for a new Lucky restaurant. The CFO has provided you with a
template that includes 6 criteria (attributes) that you are required to use in
your evaluation of 5 recommended locations. Following are the 6 criteria that
you will use to evaluate this decision:
Traffic counts (avg. thousands/day)—the more traffic, the
more customers, and the greater the potential sales.
Building lease and taxes (thousands $ per year)—the lower
the building lease and taxes, the better.
Size of building (square feet in thousands)—a larger
building is more preferable.
Parking spaces (max number of customers parking)—more customer
parking is preferable.
Insurance costs (thousands $ per year)—lower insurance costs
are preferable.
Ease of access (subjective evaluation from observation)—you
will need to “code” the subjective data. Use Excellent = 4, Good = 3, Fair = 2,
and Poor = 1.
Now that you have collected the data from various sources
(your CFO and COO, local real estate listings, personal observation, etc.), you
have all the data you need to complete an analysis for choosing the best
location. Download the raw data for the 5 locations in this Word document:
BUS520 Module 3 SLP.docx
Assignment
Review the information and data regarding the different
alternatives for a new restaurant location. Then do the following in Excel:
Table 1: Develop an MADM table with the raw data.
Table 2: Convert the raw data to utilities (scaled on 0 to
1). Show the utility weights in a second table.
Table 3: Develop a third table with even weights (16.7%) for
each variable.
Evaluate Table 3 for the best alternative.
Table 4: Complete a sensitivity analysis by assigning
weights to each variable.
In a Word document, do the following:
Discuss the process used to put together Tables 1–4 above.
Provide the rationale you used for choosing for each of the
weights you used in Table 4.
Give your recommendation of which location the company
should choose (based on results of Table 4).
SLP Assignment Expectations
Excel Analysis
Complete Excel analysis using MADM (all four tables noted
above must be included).
Accurate Excel analysis (Excel file includes working
formulas showing your calculations; all calculations and results must be
accurate).
Written Report
Length requirements: 2–3 pages minimum (not including Cover
and Reference pages). NOTE: You must submit 2–3 pages of written discussion and
analysis. This means that you should avoid use of tables and charts as “space
fillers.”
Provide a brief introduction to/background of the problem.
Discuss the steps you used to compile the Excel analysis
(i.e., the four tables).
Discuss the assumptions used to assign weights to each
variable of your sensitivity analysis (Table 4). That is, provide the rationale
for your choice of weights for each variable.
Provide a complete and meaningful recommendation related to
the location that should be chosen as a new site.
Write clearly, simply, and logically. Use double-spaced,
black Verdana or Times Roman font in 12 pt. type size.
Have an introduction at the beginning to introduce the
topics and use keywords as headings to organize the report.
Avoid redundancy and general statements such as “All
organizations exist to make a profit.” Make every sentence count.
Paraphrase the facts using your own words and ideas,
employing quotes sparingly. Quotes, if absolutely necessary, should rarely
exceed five words.
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