Question

Project Evaluation.

1. Describe the weighted average method of evaluation. How do you use it? How are the weights determined?

2. A university is evaluating whether to continue using their current CRM (Customer Relationship Management) software:

a. PowerCRM - The current system is slow, had two weeks worth of outages last year and frustrates the marketing department because it isn’t flexible.

b. The competitor is SailsForce, a CRM platform developed by a company whose founder also loves ships. It is known for being reliable and flexible. Schools using it report average recruitment of 5 additional students per year.

c. Using the above facts, choose 5 evaluation criteria, weigh the criteria and score the companies. The evaluation criteria should be pertinent to the question; use your imagination to score the companies (Hint: you can use the template) Explain your choices for criteria selection and weighting.

Answer 1

WEIGHTED AVERAGE METHOD OF EVALUATION

The weighted average method is used to evaluate the average cost of production. It is used where accounting system is not sufficiently used. While using this method, different weights are assigned to items. To calculated weighted average method, the cost of goods sold is divided by the available number of units. It yields the weighted average cost of each unit. Here, the cost of goods sold includes both the cost of inventories at beginning and the net purchases. The weighted figures are used to find cost at the end and the cost of goods sold.

Here, the assigned weights are multiplied with the data and it gives the single average value. Each weight gives the relative importance to every quantity.