EBK PRINCIPLES OF OPERATIONS MANAGEMENT
EBK PRINCIPLES OF OPERATIONS MANAGEMENT
10th Edition
ISBN: 8220102744059
Author: HEIZER
Publisher: PEARSON
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Chapter 2, Problem 9P
Summary Introduction

To determine: The suitable outsourcing provider based on cultural risk factors using factor- rating method.

Introduction:

Factor-rating method:

The factor-rating method is a quantitative approach to make a decision from various alternatives such that the decision is beneficial to the firm involved. This method is utilized to decide on new layout, new locations, best supplier, outsourcing providers etc.

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Ranga Ramasesh is the operations manager for afirm that is trying to decide which one of four countries it shouldresearch for possible outsourcing providers. The first step is to select a country based on cultural risk factors, which are criti-cal to eventual business success with the provider. Ranga has reviewed outsourcing provider directories and found that thefour countries in the table that follows have an ample numberof providers from which they can choose. To aid in the countryselection step, he has enlisted the aid of a cultural expert, JohnWang, who has provided ratings of the various criteria in thetable. The resulting ratings are on a 1 to 10 scale, where 1 is a lowrisk and 10 is a high risk.John has also determined six criteria weightings: Trust, with aweight of 0.4; Quality, with 0.2; Religious, with 0.1; Individualism,with 0.1; Time, with 0.1; and Uncertainty, with 0.1. Using thefactor-rating method, which country should Ranga select?
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