Reference no: EM132851376
You have decided it is time to invest in a cottage and have narrowed your search down to three alternatives. Cottage A is a 3-hour drive from home, has average quality swimming, and should be relatively low maintenance (about $500 per summer). Cottage B is a 5-hour drive from home, has good quality swimming but will require a little more maintenance (about $725 per summer). Cottage C is a four-hour drive from home has great water for swimming but is a little heavy on the maintenance ($1250) per summer.
a) Using travel time (quantitative), maintenance cost (quantitative) and swimming quality (qualitative) as your three decision criteria, complete a AHP analysis to select the best cottage: A, B or C. Be sure to complete all necessary consistency ratio (CR) calculations and make adjustments if necessary. Remember that for quantitative criteria there is no need to check on consistency. You will have to calculate the CR for the criteria matrix and the swimming quality matrix. Consider a CR less than 0.10 to be sufficiently consistent.
b) Once this analysis from part a is complete, make a value assessment by dividing the AHP score for each cottage by its price. Although these numbers will be very small (they can be made larger by working in thousands or even 100 thousand $ units if you like), they can be thought of as relative value assessments between the three alternatives. The alternative with the highest weight may not have the highest relative value. Would these value assessments influence your decision or would you still prefer the cottage selected in part a.?
Purchase price data for part b): A - $200,000, B - $175,000, C - $350,000