Assignment @ AUGUST 14th

When creating a decision matrix, Kurniawan said, it is important to start by understanding the problem and its implications. Once you have identified these aspects, you can create your analysis with rows and columns.

List your decision alternatives as rows, and the relevant factors affecting the decisions – such as cost, ease and effectiveness – as the columns. Establish a rating scale to assess the value of each alternative/factor combination. It is important that the rankings are consistent throughout the matrix. For example, if you are looking at pain points, be sure to word each issue so that it gets more points the worse it is, and vice versa when looking at benefits.

Multiply your original ratings by the weighted rankings to get a score, then add up all the factors under each option. The option that scores the highest is the winning choice or the first item to work on.

In this example, a restaurant owner is considering four locations. She listed the factors she finds important and assigned weights that reflect how important she considers each set of criteria to be.

Rent is a factor, but she's decided that market share, which determines how likely she is to get customers, is the most important issue. She values a location close to her home so she can visit quickly if there are problems, and she wants to set up where she can find reliable workers; however, these factors are not as important, so they receive a lower weighted score. She did not consider floor plan, because she found all of them equal in that regard and intends to remodel anyway.

When our restaurateur ran the numbers, locations 3 and 4 come up as close winners. However, looking at the individual numbers helped solidify her decision. Location 3, while the most expensive, offers the greatest opportunity to find qualified employees and attract customers. Thus, not only is it the best by overall score, but the individual factors she values help her justify the increased rent.

Keep in mind that a decision matrix is not the only decision-making tool available. For example, sometimes a simple pros and cons list works. However, for a decision where you have multiple options and diverse features to consider, a decision matrix can shed light on the best choice.