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The management of Carven Caf is considering three different locations for their newly proposed store: Heliopolis, Zayed, and 5th Settlement for its new store. The
The management of Carven Caf is considering three different locations for their newly proposed store: Heliopolis, Zayed, and 5th Settlement for its new store.
The management team has identified the five factorslisted in the following table as the basis for evaluation and has assigned weights as shown in the same table.
The operations manager has the following pieces of information to rate each location on each factor, on a 100-point basis (higher scores are better):The traffic per square meter at Zayed's site is 100 customers per sq. Meter, Heliopolis's traffic is 180 customers per sq. M. and 100 Sq. M. for 5thSettlement. |
Concerning the Labor cost at Heliopolis, it costs the business LE 100 per hour, However, for Zayed, it's relatively higher as it costs the business around LE 130 per hour. Finally, it incurs a business LE 140 per hour. |
In addition, for the availability of the target segment, Heliopolis has 60% of the requested segment, Zayed has almost 75% and the 5thSettlement has 80%. |
Zayed location rental cost is estimated to be around LE 160,000 per month, while Heliopolis costs LE 120,000, and the 5th settlement costs LE 175,000 monthly. |
Regarding Proximity to public transportation, it takes TWO blocks from the proposed Restaurant location at Heliopolis to the nearest bus and metro stations. However, it takes FIVE blocks to the nearest bus station for Zayed and FOUR blocks at 5thSettlement. |
Factor | Factor description | weight |
1 | Traffic per square meter | 0.15 |
2 | Cost of Labors | 0.25 |
3 | Availability of target segment | 0.15 |
4 | Rental Cost | 0.30 |
5 | Proximity to public transportation | 0.15 |
- Calculate the weighted score for each alternative location.
- Identify the other factors that your company may wish to include in its decision while using this factor rating approach.
- If the management team weighed the factors equally, how would the locations stack up in terms of their composite factor rating scores?
- If Rental costs and Traffic per square meter are given weights that are double the weights of the other factors, how would the locations stack up?
(NOTE: USE THE ABOVE INFORMATION LOGICALLY TO BUILD YOUR OWN STORY OF ANALYSIS i.e., YOU CAN PROPOSE WHATEVER THE SCORES YOU FIND THEM REASONABLE AS LONG AS THEY'RE SUPPORTED BY THE ABOVE-GIVEN INFORMATION)
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