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Wednesday, May 04, 2005

Comparative Matrix

Analysis is a critical skill that most humans seem to have been born with. Be it a book, mp3 player, TV, renting an apartment, buying a car or the biggest of all, selecting a life partner - all of us analyse it before deciding what to do with them

It is interesting to know that, you don't have to do mental math - all of it can be articulated and evaluated via a simple matrix. (Simple hand drawn matrix or MS Excel etc)

How does the comparative matrix work ?

The idea of comparative matrix is to be able to tabulate the products under comparison on specific selection criteria with varying importance. e.g. Compare all brands of TVs with selection criteria being Screen size, Brand Name, Sleekness and size of remote - with the first three criteria obviously being supremely important than the remote size.

Let us look at in detail (with a car example)

Now what are the players in the game ?

1) The products we are evaluating (like Camry, Accord & Maxima)
2) Selection criteria (like sleek style, resale value, maintenance, color)
3) Importance or Weightage a.k.a Weights (like resale value is critical, while color might be less important etc )

So while comparing, one should be thinking of the resalve value of toyota might be better than others, while the Accord might be sleeker than others and Maxima might be easier to maintain. You would obviously want to prioritize or weigh the importance of each criteria. Here is how you would do it.

Step 1 : Decide on the selection criteria (like Sleekness, Maintenance, Resale Value etc)
Step 2 : Assign weight/importance to the criteria - so that they add upto 100% (like Sleekness-10% Maintenance-50% Resale Value-40%)
Step 3: Decide on the list of products you want to evaluate (like Camry, Accord & Maxima)
Step 4: Write down the list of products - top-down (i.e. vertical lines)
Step 5: Write down the list of selection criteria - left-right (i.e. horizontal)
Step 6: Write down the weights under each of the selection criteria

Table 1: Basic Comparative Matrix

Sleekness(10%)Maintenance (50%)Resale (40%)Total Score
Camry
Accord
Maxima

Voila, you are now ready to come up with data for scientific evaluation, which can then provide information to make your decision making process easier.

Let us proceed... Now rate each car on a scale of 1 to 10 (1 being the lowest & 10 being the highest) for all of these criteria (like Sleekness for camry is 8, Accord is 10, Maxima is 8 etc ).

Table 2: Comparative Matrix with Rating
Sleekness(10%)Maintenance (50%)Resale (40%)Total Score
Camry8910
Accord1099
Maxima8108


The Total score is arrived at thus...

Total Score = sum of all (rating * weight) per criteria.
i.e
Total Score (for camry) = (sleekness8 * weight10) + (maintenance9 * weight50) +(Resale10 * weight40)
Total Score (for camry) = 80 + 450 + 400 = 930.

Table 3: Final Comparative Matrix
Sleekness(10%)Maintenance (50%)Resale (40%)Total Score
Camry8910930
Accord1099910
Maxima8108900


Now based on the scores, you can see that Camry comes out with the highest total score and hence is the best bet based on your ratings and weightage for the selection criteria.

As stated initially, this approach can be used for many things like renting a new apartment (Rent,Utils,Location,Commute,Lease terms,Facilities etc), Buying a home, or as some people have already vouched, for selecting your life partner !

Disclaimer: The brands used here are all trademarks of the respective organizations and this blog's intention is not to judge any brand, it was used for representative purposes only. The author is not responsible for any damages/failed evaluation based on the use of this matrix idea, especially your life partner ;p !

Now that you are armed with the best method of evaluation, Sit back, relax & enjoy...wait, don't forget to put this to use for the betterment of your lifestyle :-)

4 comments:

Anonymous said...

Looks like you are explaining about the Pugh Matrix.

Check this --> http://mielsvr2.ecs.umass.edu/virtual_econ/module2/pugh_method.htm

Anonymous said...

This is the correct link --> http://mielsvr2.ecs.umass.edu/virtual_econ/module2/pugh_method.htm

Arvind said...

Ofcourse-I did not know that it had a name-this matrix is being used extensively in supply-chain management to evaluate/decide on vendors based on the RFP/Proposal process.

I have just made the simplified version and illustrated it with an example that can be put to use in daily activities to more scientifically analyse & evaluate for lay-people.

Anonymous said...

Please add Corolla also to the list