Ranga Ramasesh is the operations manager for a firm that is trying to decide which one of four countries it should research for possible outsourcing providers. The first step is to select a country based on cultural risk factors, which are critical to eventual business success with the provider. Ranga has reviewed outsourcing provider directories and found that the four countries in the table that follows have an ample number of providers from which they can choose. To aid in the country selection step, he has enlisted the aid of a cultural expert, John Wang, who has provided ratings of the various criteria in the table. The resulting ratings are on a 1 to 10 scale, where 1 is a low risk and 10 is a high risk. John has also determined six criteria weightings: Trust, with a weight of 0.4; Quality, with 0.2; Religious, with 0.1; Individualism, with 0.1; Time, with 0.1; and Uncertainty, with 0.1. Using the factor-rating method, which country should Ranga select
a) With weights from 1-5 (5 highest) and ratings 1-100 (100 highest), use the following table to help Garza make his decision:
|
Criterion
|
Weight
|
Rating of Logistics Providers
|
|
Overnight Shipping
|
Worldwide Delivery
|
United Freight
|
|
Quality
|
5
|
90
|
80
|
75
|
|
Delivery
|
3
|
70
|
85
|
70
|
|
Cost
|
2
|
70
|
80
|
95
|
b) Garza decides to increase the weights for quality, delivery, and cost to 10, 6, and 4, respectively. How does this change your conclusions? Why?
c) If Overnight Shipping's ratings for each of the factors increase by 10%, what are the new results.