Claudia Pragram Technologies, Inc., has narrowed its choice of outsourcing provi

Question

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 4 is a higher risk. Using the unweighted factor-rating method, which country would you select? In the following table, compute the total unweighted score for each candidate (enter each response as a whole number). Based on a comparison of risk scores, Claudia Pragram should choose as the best country for outsourcing. If the first two factors (price and nearness) are given a weight of 2, and the last two factors (technology and history) are given a weight of 1, how does your answer change? In the following table, compute the total weighted score for each candidate (enter each response as a whole number).

Explanation / Answer

Using the unweighted rating factor , total scores of England is 9 (1+3+1+4) and total scores of Canada is 7(1+2+3+1).

The ratings are based on 1 for the low risk and 4 for high risk which means lower number for lower risk as compared to higher number representing higher level of risk.

Therefore based on the total, Claudia's program should choose CANADA as the best country for outsourcing.

b.

In case of weighted scores, the table is as follows:

2

Total weighted score for England = 2*1 + 2*3 + 1*1 + 1*4 = 2+6+1+4 = 13

Total weighted score for Canada = 2*1 + 2*2 + 1*3 + 1*1 =2+4+3+1 =10

Based on comparison of weighted risk score, Claudia Program should choose CANADA as the best country for outsourcing

Selection criteria Weights England Canada Price 2 1 1 Nearness 2 3

2

Technology 1 1 3 History 1 4 1 Total weighted score 13 10

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