Operations
Management
Chapter 8 –
Location Strategies
Extra Practice by Jun Jie, Ng
Textbook solution: Based upon her ratings of the critical success factors, Patricia should choose Turkey.
From a practical perspective, given the small difference between the scores for Turkey and Slovakia, and the subjectivity of the ratings
themselves, Patricia would be better advised to develop additional critical success factors, more carefully weigh the individual factors; or, in
general, to acquire more information before making her decisions.
Solution from the textbook
(a) Doubling the number of critical success factors. There are two issues here. First, from
a practical perspective there are a limited number of truly “critical” success factors –
and these should be the ones presently being considered. Any additional factors
should be of secondary or tertiary importance. Second, given the subjective nature
of the rating process, adding additional factors would also increase the overall
margin of error of the final ratings to a degree that may eliminate any gain in
differentiation arising from the use of the additional factors. The use of a maximum
of seven to nine critical success factors is usually appropriate.
(b) Given that one’s ability to estimate or rate an aggregate is usually better than one’s
ability to estimate or rate the individual components of the aggregate, this approach
is unlikely to provide much help.