Question

Question 1: (C011 a) Mahmuda is trying to decide in which of four shopping centers to locate her new boutique. Some cater to a higher class of clientele than others, some are in an indoor mall, some have a much greater volume than others, and, of course, rent varies considerably. Because of the nature of her store, she has decided that the class of clientele is the most important consideration. Following this, however, she must pay attention to her expenses, and rent is a major item - probably 90 percent as important as clientele. An indoor, temperature controlled mall is a big help for stores such as hers, where 70 percent of sales are from passersby slowly strolling and window shopping. Thus, she rates this as about 95 percent as important as rent. Last, a higher volume of shoppers means more potential sales; she thus rates this factor as 80 percent as important as rent.

Answer 1

Here,

Clientele = 100

Rent = 90

Indoor Mall = 90*0.95 = 85.5

Volume = 90*0.8 = 72

Total = Clientele + Rent + Indoor Mall + Volume = 100+90+85.5+72 = 347.5

The weight for each category will be score of that category divided by the total score.

Hence weights of,

Clientele = 100/347.5 = 0.2877 = 0.29

Rent = 90/347.5 = 0.25899 = 0.26

Indoor Mall = 85.5/347.5 = 0.2460 = 0.25

Volume = 72/347.5 = 0.20719 = 0.20

Now the table for each location:

Category	Wight	Location 1	Location 2	Location 3	Location 4
Class of Clientele	0.29	Fair	Good	Poor	Good
Rent	0.26	Good	Fair	Poor	Good
Indoor Mall	0.25	Good	Poor	Good	Poor
Volume	0.20	Good	Fair	Good	Poor

We know that

Good = 3

Fair = 2

Poor = 1

Modifying the table accordingly:

Category	Wight	Location 1	Location 2	Location 3	Location 4
Class of Clientele	0.29	2	3	1	3
Rent	0.26	3	2	1	3
Indoor Mall	0.25	3	1	3	1
Volume	0.20	3	2	3	1

Hence calculating the total weighted score for each location:

Location 1:

Total score = 2*0.29 + 3*0.26 + 3*0.25 + 3*0.20 = 0.58 + 0.78 + 0.75 + 0.6 = 2.71

Location 2:

Total score = 3*0.29 + 2*0.26 + 1*0.25 + 2*0.20 = 0.87 + 0.52 + 0.25 + 0.4 = 2.04

Location 3:

Total score = 1*0.29 + 1*0.26 + 3*0.25 + 3*0.20 = 0.29 + 0.26 + 0.75 + 0.6 = 1.9

Location 4:

Total score = 3*0.29 + 3*0.26 + 1*0.25 + 1*0.20 = 0.87 + 0.78 + 0.25 + 0.2 = 2.1

Hence the boutique should be opened in Location 1 (which has highest total weighted score of 2.71).

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