M1.1 Multifactor Evaluation Process
With the MFEP, we start by listing each factor and its relative importance on a scale from 0 to 1.
Let’s consider an example. Steve Markel, an undergraduate business major, is looking at several job opportunities. After discussing the employment situation with his academic advisor and the director of the placement center, Steve has determined that the only three factors really important to him are salary, career advancement opportunities, and location of the new job. Furthermore, Steve has decided that career advancement opportunities are the most important to him. He has given this a weight of 0.6. Steve has placed salary next, with a weight of 0.3. Finally, Steve has given location an importance weight of 0.1. As with any MFEP problem, the importance weights for factors must sum to 1 (see Table M1.1).
Table M1.1 Factor Weights
| FACTOR | IMPORTANCE (WEIGHT) |
|---|---|
| Salary | 0.3 |
| Career advancement | 0.6 |
| Location | 0.1 |
At this time, Steve feels confident that he will get offers from AA Company, EDS, Ltd., and PW, Inc. For each of these jobs, Steve evaluated, or rated, the various factors on a 0 to 1 scale. For AA Company, Steve gave salary an evaluation of 0.7, career advancement an evaluation of 0.9, and location an evaluation of 0.6. For EDS, Steve evaluated salary as 0.8, career advancement as 0.7, and location as 0.8. For PW, Inc., Steve gave salary an evaluation of 0.9, career advancement an evaluation of 0.6, and location an evaluation of 0.9. The results are shown in Table M1.2.
Table M1.2 Factor Evaluations
| FACTOR | AA CO. | EDS, LTD. | PW, INC. |
|---|---|---|---|
| Salary | 0.7 | 0.8 | 0.9 |
| Career advancement | 0.9 | 0.7 | 0.6 |
| Location | 0.6 | 0.8 | 0.9 |
Given this information, Steve can determine a total weighted evaluation for each of the alternatives or job possibilities. Each company is given factor evaluations for the three factors, and then the factor weights are multiplied by the factor evaluations and summed to get a total weighted evaluation for each company. As you can see in Table M1.3, AA Company has received a total weighted evaluation of 0.81. The same type of analysis is done for EDS, Ltd., and PW, Inc., in Tables M1.4 and M1.5. As you can see from the analysis, AA Company received the highest total weighted evaluation; EDS, Ltd., was next, with a total weighted evaluation of 0.74. Using the MFEP, Steve’s decision was to go with AA Company because it had the highest total weighted evaluation.
Table M1.3 Evaluation of AA Company
| FACTOR NAME | FACTOR WEIGHT | FACTOR EVALUATION | WEIGHTED EVALUATION | ||
|---|---|---|---|---|---|
| Salary | 0.3 | × | 0.7 | = | 0.21 |
| Career | 0.6 | × | 0.9 | = | 0.54 |
| Location | 0.1 | × | 0.6 | = | 0.06 |
| Total | 1 | 0.81 |
Table M1.4 Evaluation of EDS, Ltd.
| FACTOR NAME | FACTOR WEIGHT | FACTOR EVALUATION | WEIGHTED EVALUATION | ||
|---|---|---|---|---|---|
| Salary | 0.3 | × | 0.8 | = | 0.24 |
| Career | 0.6 | × | 0.7 | = | 0.42 |
| Location | 0.1 | × | 0.8 | = | 0.08 |
| Total | 1 | 0.74 |
Table M1.5 Evaluation of PW, Inc.
| FACTOR NAME | FACTOR WEIGHT | FACTOR EVALUATION | WEIGHTED EVALUATION | ||
|---|---|---|---|---|---|
| Salary | 0.3 | × | 0.9 | = | 0.27 |
| Career | 0.6 | × | 0.6 | = | 0.36 |
| Location | 0.1 | × | 0.9 | = | 0.09 |
| Total | 1 | 0.72 |