What’s Wrong With Using The Weighted Criteria Method

We are always making decisions. For some, it might be the simpler decision of which flavor of ice cream to choose from the 31 flavors available or which house to buy. For those in the business world, it might be the much more complex decision regarding a capital allocation for a corporation where millions are at stake, or deciding which of the three strategic alternatives would provide the best NPV for the company. How should we choose between the options? Today’s podcast examines a popular decision-making method called weighted criteria, a tool used to evaluate a set of choices against a set of criteris weighted according to their importance. The question we examine today is, does this method provide a means for sound decision-making and what are the better questions we need to be asking?

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