Question

The Security National Bank is considering two locations for a new branch. The two choices are a major mall and a strip mall. The site selection team is evaluating two sites, and they have scored the critical success factors for each as shown below. The weights reflect the same relative importance as we have used in class. They want to use these ratings to compare the locations

Critical Success Factor	Factor Weight	Major Mall Site	Strip Mall Site
Relocation Cost	0.30	$240,000	$190,000
Customer Service	0.40	3.0	2.5
Service Quality	0.10	2.4	1.8
Security and Safety	0.10	1.8	2.4
Market Share	0.10	2.1	1.8

The non-economic scores are on a 0 to 3.0 basis with 3.0 being best and it is possible to achieve the 3.0 score.

1. Using the factor scoring (rating) method , which site should Security National Bank use based on the above information?

2. Suppose the 3.0 value for the customer service for the major mall site is questionable. At what customer service score for the major mall site would the bank change its decision from what it found in #1?

Answer 1

Assign a score of 3.0 for relocation cost to the 'Strip Mall Site' for the minimum cost of 190,000.
Assign a score of 3.0 * 190/240 = 2.375 for relocation cost to the 'Major Mall Site'

(a)

Weighted score for the 'Major Mall Site' = 0.3*2.375 + 0.4*3.0 + 0.1*2.4 + 0.1*1.8 + 0.1*2.1 = 2.5425

Weighted score for the 'Strip Mall Site' = 0.3*3.0 + 0.4*2.5 + 0.1*1.8 + 0.1*2.4 + 0.1*1.8 = 2.50

So,

Based on the highest weighted score, 'Major Mall Site' should be selelcted.

(b)

Let the raw score for 'Major Mall Site' for customer service = R_c

So, to retain the condition of part-a:

0.3*2.375 + 0.4*R_c + 0.1*2.4 + 0.1*1.8 + 0.1*2.1 > 2.50
or, 0.4*R_c + 1.3425 > 2.50
or, R_c > 2.89375

So, the raw score of customer service for 'Major Mall Site' should at least be 2.9 to have it the best alternative.