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Claudia Pragram Technologies, Inc., has narrowed its choice of outsourcing provider to two firms located in different countries. Pragram wants to decide which one of the two countries is the better choice, based on risk-avoidance criteria. She has polled her executives and established four criteria. The resulting ratings for the two countries are presented in the table below, where 1 is a lower risk and 3 is a higher risk.
SELECTION CRETERION
ENGLAND
CANADA
Price of service from outsourcer
2
3
Nearness of facilities to client
1
Level of Technology
History of successful outsourcing
The executives have determined four criteria weightings: Price, with a weight of 0.1; Nearness, with 0.6; Technology, with 0.2; and History, with 0.1.
a) Using the factor-rating method, which country would you select?
b) Double each of the weights used in part (a) (to 0.2, 1.2, 0.4, and 0.2, respectively). What effect does this have on your answer? Why?
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