Question

Subway, with more than 27,000 outlets in the U.S., is planning for a new restaurant in Berks County, PA. The three locations are being considered. The following table gives the factors for each site.

Factor	Weight	Exeter	West Reading	Kutztown
Space	0.3	60	70	80
Costs	0.25	40	80	30
Traffic density	0.2	50	8	60
Neighborhood income	0.15	50	70	40
Zoning laws	0.1	80	20	90

a. At which site should Subway open the new restaurant?

b. If the weights for Space and Traffic density were reversed, how would this affect the decision?

Answer 1

Answer:

a)

• The weighted score for each of the sites will be the sumproduct of weights of each of the factors and the score of that factor for the site.
• Excel formula view for the same is below:

Exeter West Reading Kutztown Weight 0.3 0.25 0.2 0.15 80 1 Factor 2 Space 3 Costs 4 Traffic density 5 Neighborhood income 6 Zoning laws 7 Weighted score 30 60 0.1 =SUMPRODUCT($B2:$B6, C2:06) =SUMPRODUCT($B2:$B6,D2:D6) =SUMPRODUCT($B2:$B6,E2:E6)

• The site with the highest weighted score will be the one where the subway should open a restaurant.
• Calculating the weighted scores:

E 80 А BC 1 Factor Weight Exeter West Reading Kutztown 2 Space 3 Costs 0.25 4 Traffic density 0.2 5 Neighborhood income 0.15 70 6 Zoning laws 0.1 20 7 Weighted score 55.1 58.5|

• So the subway should open the next store at Kutztown as it has the highest score.

b)

• Similarly calculating weighted score after reversing space and traffic density weights:

B 80 1 Factor Weight Exeter West Reading Kutztown 2 Space 0.2 3 Costs 0.25 40 4 Traffic density 0.3 5 Neighborhood income 0.15 6 Zoning laws 7 Weighted score 52.5 48.9 56.5 8 0.1 90

• Still, Kutztown is the best site to open the restaurant.