A manager in ceramic factory has to choose a new packing machine to replace the existing one which is wearing out. The manager has a limited budget for the purchase and has narrowed down the possible options to three: Firm A, Firm B and Firm C. However, the decision is still proving to be difficult because of variety of attributes associated with the machines, such as the purchase price, reputation for reliability and the quality of after-sales support provided by the different manufacturers.

There are two main criteria cost and quality. The manager may purchase a new one or upgrade the current one in Firm A, Firm B or Firm C under cost (2 criterion). The manager takes reliability, after-sales support, speed of delivery and customization in terms of quality (under quality 4 criterion). The manager made following comparisons for criteria to apply Analytical Hierarchy Process. But these comparisons may not be enough to solve the problem.

	Costs	Quality
COSTS	1	5
QUALITY		1

	RELIABILITY	AFTER SALES REPORT	SPEED OF DELIVERY	Customization
RELIABILITY	1	4	5	4
AFTER SALES REPORT		1	3	1/2
SPEED OF DELIVERY			1	1/3
Customization				1

COST	FIRM A	FIRM B	FIRM C
FIRM A	1	1/3	2
FIRM B		1	6
FIRM C			1

a. Assume that you are manager and complete the comparisons needed.

b. Calculate your inconsistency index show it is fine to use.

c. What is your decision?

Answer rating: 100% (QA)

Solution New Matrix for decision making Criteria 1 to 3 1 is lowest and ... View the full answer