MBA 542

Fall 2020
Location Decisions
Factor Rating Example

The owner/manager of a small restaurant is considering two location alternatives in the suburban areas
for her new restaurant. She has identified the following factors for choosing a location: Customer traffic
volume during the day, ease of travel to from the city centre, size of the location, shape of the
commercial space, size of the kitchen space, parking availability, remodeling expenses, and monthly
rent. Some of these factors are qualitative whereas some are clearly quantitative. The manager wants to
combine them all to get an aggregate assessment of the alternatives. To this end, she has weighted each
alternative with respect to each other and also scored each of the alternatives along these factors. The
resulting data is provided below.

FACTOR WEIGHT LOCATION A LOCATION B

Daily traffic volume 8 80 85
Ease of travel 20 90 85
Size 30 90 100
Shape 6 70 90
Kitchen space 8 90 90
Parking 8 50 90
Remodeling costs 5 80 90
Rent 15 90 70

a. Which location is the best choice?

b. Consider what might change the decision. To what is this decision sensitive?