BUS Project Management practice Decision Making. Revised: additonal notes Jan.23, 04.

Weighted Decision Matrix example completed for choosing a a movie for distribution- each movie is a project. This was an exam question and the format will remain the same for the Mid Term

  Using the chart below show your decision making criteria, ranking and scores for deciding which of the following three projects you would choose. 15 marks

    Q.  These are the R.F.P. Requirements (Note you will be given similar information that enables you to complete the top part of the documents). The proposals at the end of form are evaluated against the Rank/Ranges. The weighting remains the same in each column.

Q.  You are financing/producing a movie.  In order of importance – 1^st you wish to gain a reputation (international) and think this is worth 50 % of your decision; 2^nd use a well-recognized director (must have directed 5 to 30 movies) 25%; be a low budget film ($250,000 - $750,000) 15%; and last make a profit ($100,000 to $1,000,000) 10%.  1 0 marks.

Project 1.  Movie: “Red Hot Mama!" (or Papa!).  Can get distribution in N. America, Asia and Europe.  Can be made for $750,000; director available has done 10 movies, and projected profit is $250,000.

Project 2.  Movie: “The Thickies!”  Can get distribution in N. America and Taiwan.  Cost  $500,000; director has made 5 movies, profit expected at $1,000,000

Project 3.  Movie: “He’s not my father!”  Can get distribution in 5 continents.  Costs estimated at $650,000, director has 25 movies to her credit and profit will be $250,000 because of high distribution costs.

The END! 

Tips. When you review the R.F.P. you can see what is most important to the decision makers. In this case they want a movie that gains an international reputation. In order to get that they decide on the other weighted criteria. These decisions are made by an Executive Committee in a corporation or by you and your team if you are making the decisions.

After you have decided on or found the weights enter these numbers in columns. e.g. the 50% weight you are giving for Reputation is recorded/repeated for each Proposal in the Reputation column.

The 25% weight for the Director is repeated for each Proposal. etc.

Let's test the first Proposal. Distribution is is 3 continents. Look at the Rank/Range. 3 Continents gets a score of three. So we put the 3 in the Decision Matrix box beside the 50% weight.

The budget for the first Proposal is $750, 000. We now look in column 2 and find the Ranking # for $750,000. Because that is the worst (highest amount we want to spend making the movie) we find it gets a 1 score. Write the 1 beside the 15% Weight.

The Director has made ten previous movies. We look in column two and find that Ten movies gets a rank of 2. We enter the 2 beside the 25% Weighting.

The Profit for movie/Proposal one is $250,000. we look in the Profit column. This amount get a Rank get a score of 2. Enter the 2 against the weight of 10%.

You now have the data needed to calculate a score. Multiply the numbers on the Rank line and add the totals on the horizontal line. We get a Total of 235 for the first proposal. Repeat the process for the remaining movies. Because we decided that 1 is a low ranking the highest number on the scores is the Best proposal.

Depending on which class you are in you have been given a case to try the above on. If you are choosing which dinner to serve your date you have some personal decisions too make in terms of taste. The weighting given should result in everyone getting the same answer.

If you are working on the case where you decide how to spend the $200, 000 the decision criteria will be posted on your class web site for Wk. 4