Making objective decisions can be difficult. The fact is that emotion and personal feelings play as much a part of most decisions as facts and figures, sometimes more. This week we had a chance to practice making choices using a system of weighted criteria. It works kinda like this:
When deciding between two or more possible choices, several factors are picked that can be directly compared between the two. Each of those factors is then weighted using a percentage, with higher weight being given to the most important factor, and lower weight being given to the less important. The total weight of all factors should equal 100%.
Then, each choice is evaluated on each criteria on a scale of 1 to 5, or 1 to 10 (the total spread doesn’t really matter as long as the same is used across the board). Using a spreadsheet makes this much easier as there is a formula involved, but the final total value of each criteria determines which is the best choice.
Here are two examples from this week’s work:
The first exercise compared two suppliers of sunglasses. I used price, minimum order, reliability, and selection as the criteria and I weighted minimum order highest and selection lowest. L.A. Wholesale was the winner in this comparison.
The second comparison was between two types of product suppliers, an affiliate program relationship, or a drop shipping relationship. For our purposes, I weighted ease of implementation as highest, resulting in an affiliate program being the winner.
This type of comparison is very helpful. Although it doesn’t eliminate the emotion of decision making, it allows us to quantify and reasonably compare any type of criteria. To me this seems similar to the old fashioned method of creating a list of pros and cons and seeing which which list is larger to determine if a course of action is good or bad. This method allows for comparing several courses of action to each other, and I can see many possible applications for this type of decision making in both business and personal life.