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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Chapter 2, Problem 9P

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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 a firm that is trying to decide which one of four countries it should research for possible outsourcing providers. The first step is to select a country based on cultural risk factors, which are critical to eventual business success with the provider. Ranga has reviewed outsourcing provider directories and found that the four countries in the table that follows have an ample number of providers from which they can choose. To aid in the country selection step, he has enlisted the aid of a cultural expert, John Wang, who has provided ratings of the various criteria in the table. The resulting ratings are on a 1 to 10 scale, where 1 is a low risk and 10 is a high risk. John has also determined six criteria weightings: Trust, with a weight 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 the factor-rating method, which country should Ranga select?

Ranga Ramasesh is the operations manager fora firm that is trying to decide which one of four countries itshould research for possible outsourcing providers. The firststep is to select a country based on cultural risk factors, whichare critical to eventual business success with the provider.Ranga has reviewed outsourcing provider directories andfound that the four countries in the table that follows have anample number of providers from which they can choose. Toaid in the country selection step, he has enlisted the aid of acultural expert, John Wang, who has provided ratings of thevarious criteria in the table. The resulting ratings are on a 1 to10 scale, where 1 is a low risk and 10 is a high risk. John has also determined six criteria weightings: Trust,with a weight 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 the factor-rating method, which countryshould Ranga select?

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