BUSQOM 1070 Chapter Notes - Chapter 8: Variable Cost, Absenteeism, Geographic Information System
Document Summary
Section 3 methods of evaluating location alternatives resources, and talent resources: the factor-rating method. Operations management: managers can use weightings to make the decision process more objective, factor-rating method: popular because a wide variety of factors, from education to recreation to labor skills, can be objectively included, 6 steps, 1. Develop a list of relevant factors called key success factors: 2. Assign a weight to each factor to reflect its relative important in the company"s objectives: 3. Develop a scale for each factor: 4. Have management score each location for each factor, using the scale in step 3: 5. Multiply the store by the weights for each factor and total the score for each location: 6. Determine the fixed and variable cost for each location: 2. Plot the costs for each location, with costs on the vertical axis of the graph and annual volume on the horizontal axis: 3.