"The company looking for a relocation site". Here's an example of using Excel in decision making:
We assume that a company intends to relocate to a new location within the city and is asked to select one of the five options that were deemed appropriate following a survey conducted by specialized professionals:
1. Point A,
2. Point B,
3. Point C,
4. Point D,
5. Point E.
Following a study, and based on the experience of the owner, the business pays particular attention to the following criteria when selecting a location:
A. Distance from customers (target group),
B. Store size,
C. Rental price,
D. Existence of a parking lot.
Thus, a table has been drawn up with the details of each site in relation to the above decision criteria:
Then, rating scales are compiled for each category separately. Evaluation can be based on empirical data, can be investigated or based purely on the subjectivity of the decision maker.
In order to have a uniform assessment, it is recommended to select a common scale for all criteria, eg. from 0 to 100, with 0 being the least satisfactory characteristic and 100 being the most desirable. The grading does not have to follow the 0-25-50-75-100 rating that is used in the example.
Regarding the "distance from the customers" criterion, the company defined the following scale:
1. Very short distance: 100 degrees
2. Short distance: 75
3. Normal distance: 50
4. Long Distance: 0
The size of the candidate store was evaluated as follows:
1. Up to 100 sqm: 0 points
2. 101 to 150 sqm: 25
3. 151 to 200 sqm: 50
4. 201 to 250 sqm: 75
5. Over 250 sqm: 100
For the rental price the scale was:
1. Up to 1000 €: 100 points
2. 1001 - 1500 €: 75
3. 1501 to 2000 €: 50
4. 2001 to 2500 €: 25
5. Over 2000 €: 0
Finally, the existence of a parking lot is rated "100", while non-existence means 0 points.
Each criterion is then evaluated separately (usually on the same scale from 0-100) and its significance is weighted.
For example:
1. Distance to customers: 40
2. Room size: 55
3. Purchase price: 70
4. Parking: 65
This is what a decision analysis application needs to produce results and help the user to make the right decision.
By changing the weight of each criterion, you see that the best / worst alternatives change each time (video in Greek):
