An airport Baggage Handing Department has evaluated two proposals for baggage delivery conveyor systems. A present worth analysis at i = 15% per year of estimated revenues and costs resulted in PWA =...

An airport Baggage Handing Department has evaluated

two proposals for baggage delivery conveyor

systems. A present worth analysis at i = 15% per

year of estimated revenues and costs resulted in

PWA = $460,000 and PWB = $395,000. In addition

to this economic measure, three more attributes

were independently assigned a relative importance

score from 0 to 100 by the department manager

and a senior team supervisor.

Importance Scores

Attribute Manager Supervisor

1. Economics 80 25

2. Durability 35 80

3. Safety 30 100

4. Maintainability 20 90

Separately, you have used the four attributes to

value rate the two proposals on a scale of 0 to 1.0

as shown in the following table. (The economics

attribute was rated using the PW values.)

Value Rating

Attribute Proposal A Proposal B

1. Economics 1.00 0.90

2. Durability 0.35 0.50

3. Safety 1.00 0.20

4. Maintainability 0.25 1.00

Select the better proposal using each of the following

methods:

(a) Weighted evaluation of the department manager

(b) Weighted evaluation of the team supervisor

(c) Present worth