Weighted Ranking

Weighted Ranking is a decision-making technique designed to provide an objective evaluation of various options based on multiple criteria. This method is especially useful for business analysts when they need to make choices that are aligned with business goals and objectives.

Components of Weighted Ranking

Criteria

These are the different factors or attributes that are important for the decision-making process. Criteria could include things like cost, time, quality, or risk among others.

Weights

Each criterion is assigned a weight based on its importance relative to the overall objective. The sum of all weights should ideally equal 1. The weights quantify the significance of each criterion in the decision-making process.

Rating

For each option under consideration, a rating is assigned for each criterion. This rating is done independently of the other options and usually on a predefined scale (e.g., 0-3 where 0 = Does not satisfy, 1 = Lightly satisfies, 2 = Partially satisfies, 3 = Fully satisfies).

Weighted Score

The rating for each criterion is multiplied by its respective weight to calculate the weighted score for that criterion.

Calculation

The weighted score for each criterion is summed to get the total score for each option. The options are then ranked based on their total scores. Mathematically, it's represented as:

$$\text{Total Score (Option)}=\sum _{i=1}^n{\text{(Weight of Criterion}}_i\times {\text{Rating of Option for Criterion}}_i)$$

Sample Calculation

Using the example provided:

• Option #1: $0.6\cdot (3\cdot 0.2)+0.8\cdot (2\cdot 0.4)+0+0.3\cdot (3\cdot 0.1)=1.7$

• Option #2: $0+0+0.6\cdot (2\cdot 0.3)+0.2\cdot (2\cdot 0.1)=0.8$

• Option #3: $0.2\cdot (1\cdot 0.2)+1.2\cdot (3\cdot 0.4)+0.3\cdot (1\cdot 0.3)+0.2\cdot (2\cdot 0.1)=1.9$

Final Ranking would be Option #3 (1.9), followed by Option #1 (1.7), and then Option #2 (0.8).

Application in Business Analysis

Weighted Ranking can be particularly effective in scenarios where multiple stakeholders have diverse viewpoints or when criteria are complex and varied. It supports the objectivity of the decision-making process and can be aligned well with the identified business goals and objectives. By using a weighted ranking matrix, business analysts can present a compelling case for the chosen option backed by quantitative data.

Example

Items to Be Ranked	Criteria 1 (Weight 0.2)	Criteria 2 (Weight 0.4)	Criteria 3 (Weight 0.3)	Criteria 4 (Weight 0.1)	Total Score	Final Rank
Option #1	3 x 0.2 = 0.6	2 x 0.4 = 0.8	0 x 0.3 = 0	3 x 0.1 = 0.3	1.7	2
Option #2	0 x 0.2 = 0	0 x 0.4 = 0	2 x 0.3 = 0.6	2 x 0.1 = 0.2	0.8	3
Option #3	1 x 0.2 = 0.2	3 x 0.4 = 1.2	1 x 0.3 = 0.3	2 x 0.1 = 0.2	1.9	1

In this example, each option is evaluated based on four criteria, each with its own weight. The scores for each criterion are calculated by multiplying the rating by the weight. These scores are then summed to get the total score for each option, which determines its final rank. As per the calculated scores, Option #3 ranks the highest with a total score of 1.9, followed by Option #1 with a total score of 1.7, and Option #2 with a total score of 0.8.

Quiz

Loading...