You work in direct sourcing for a large online retailer. You have been given the task of selecting one of three new automated order fulfillment systems based on five criteria: The criteria are (A)Performance, (B)Savings, (C)Serviceability, (D)Engineering Effort, and (E)Risk (lack of). One of your colleagues has begun an AHP analysis and calculated the preference matrix using Saaty’s scale as follows: Table 1. Attribute Preference Matrix A B C D E A 1 1/3 5 6 5 B 3 1 6 7 6 C 1/5 1/6 1 3 1 D 1/6 1/7 1/3 1 1/4 E 1/5 1/6 1 4 1 After an initial round of RFI’s, you have identified three possible vendors (V1, V2, V3). You asked specialists in your company to evaluate the order automated order fulfillment system from each vendor on each criterion. After reviewing the comments from your firm, you surmise the following: With regard to performance (A), vendor 1 is identical to vendor 3. Vendor 2 is moderately preferred to vendor 1. Vendor 2 is equally to moderately preferred over vendor 3. With regard to savings (B), the system sold by vendor 1 will save the firm and estimated $300M, while vendor 2’s firm will save $350M. Vendor 3’s system will save the company $400M. (This is over the entire life of the system, net of depreciation.) In terms of serviceability (C ) vendor 1 is equally to moderately preferred to vendors 2 and 3. No one seems to detect a difference between the serviceability of vendors 2 and 3. The engineering efforts required for implementing and tweaking the system (D), measured in person hours, are 500, 700 and 1100 for vendors 1, 2 and 3 respectively. In terms or risk (actually this is really lack of risk) (E), vendor 2 is equal to moderately preferred over vendor 3. Vendor 1 is moderately preferred to vendor 2. Vendor 1 is moderately to strongly more preferred than vendor 3. YOUR ANALYSIS: Using the information from the attribute preference matrix write out in words how the performance criteria compares to all the others. (Just performance—not all possible comparisons please.) 1. What is the priority weight for each criterion (attributes A, B, C, D, E)? 2. What are the score for each vendor for the three attributes shown below? (There should be one priority weight for each vendor for each attribute.) 3. What is the consistency ratio of vendor evaluations with respect to Performance (A), Serviceability (C), and Risk (E)? What do you conclude from each of those numbers? 4. To be complete, should you calculate the consistency ratio for criteria B and D? Why or why not? 5. What is the overall score for each vendor? Which vendor would you recommend based on this AHP analysis? Table 2. Criteria Specific Vendor Evaluations: Performance (A) V1 V2 V3 PW V1 1 0.33 1 V2 3 1 2 V3 1 0.5 1 5 1.83 4 Serviceability (C) V1 V2 V3 PW V1 1 2 2 V2 0.5 1 1 V3 0.5 1 1 2 4 4 Reduced Risk (E) V1 V2 V3 PW V1 1 3 4 V2 0.33 1 2 V3 0.25 0.5 1 1.58 4.5 7