International Oil Company (IOC) uses credit scoring to evaluate gasoline credit card applications. The following table presents the fi nancial and credit characteristics and weights (indicating the...

International Oil Company (IOC) uses credit scoring to evaluate gasoline credit card applications. The following table presents the fi nancial and credit characteristics and weights (indicating the relative importance of each characteristic) used in the credit decision. The fi rm’s credit standards are to accept all applicants with credit scores of 80 or higher, to extend limited credit on a probationary basis to applicants with scores higher than 70 and lower than 80, and to reject all applicants with scores below 70. Financial and Credit Characteristics Predetermined Weight Credit references 0.25 Education 0.10 Home ownership 0.10 Income range 0.15 Payment history 0.30 Years on job 0.10 The fi rm needs to process three applications that were recently scored by one of its credit analysts. The scores for each of the applicants on each of the fi nancial and credit characteristics are summarized in the following table. Financial and Applicants’ Scores (0 to 100) Credit Characteristics X Y Z Credit references 60 90 80 Education 75 80 80 Home ownership 100 90 60 Income range 70 70 80 Payment history 60 85 70 Years on job 50 60 90 a. Use the data presented to fi nd the credit score for each of the applicants. b. Recommend the appropriate action that the fi rm should take for each of the three applicants.