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Decision Matrix

Decision Matrix

What is this?

A technique that was developed by Stuart Pugh. This tool is used during a decision making process to evaluate potential solutions or courses of action.

When and why is this tool used?

Whether it is a personal or a business related issue, use the decision matrix when you have to make a decision between several choices. Additionally, when you have a decision that has split your team into camps, the tool will help you be more objective and enables you to choose the best option for your business.

How is this tool used?

Choose your decision matrix template, or use our ready-made template below.
 

Step 1 (Identify all your options and criteria):

Brainstorm all your options. List them across the columns of the sheet; make sure you include every available option. Afterwards, list the criteria upon which you are going to make your decision. Add them across the rows of the sheet (refer to the example in the case study below). If you’re doing this as a group, make sure everyone agrees what the criteria mean.

Step 2 (Set weights for your criteria):

Since the criteria are not usually of the same importance, you can rate each one of them based on the importance to add more accuracy to the evaluation. You can add the importance score (e.g.: 1 to 5 according to importance) in a separate column in front of each criterion.

Step 3 (Rate your options):

Before rating the options, determine a scoring scale (e.g., 1 to 5 or 1 to 10). If you are working with a team make sure they all have a common understanding of what high, medium, and low scores represent. Start assigning a score for every criterion. To calculate the final score for each solution, multiply the score it got under each criterion by the criterion importance score. Add all the scores.

Hints for using this tool

Review your decision matrix sheet, compare the final scores. The highest score indicates the most relevant decision. If you are satisfied with that option then you have made your decision.

If not, revisit the previous steps; think if there is more criteria you can evaluate your options upon. List the new criteria and repeat the previous steps till you reach a satisfying decision.

Case Study

Here is a decision matrix for Omar, who is about to prepare his company’s new office and can’t make a decision about which supplier to choose.

Omar is considering three suppliers; the criteria he is trying to evaluate are cost, product quality, and after purchase service. Product quality is the most important criterion for Omar; he gave it the weight of 50% of his decision. He then adds 30% importance for the cost and 20% for the after purchase service.

He starts to evaluate every criterion for every option he has, giving it a score from 1 to 5, where 1 is the worst and 5 is the best.

Omar then does his calculation, as shown in the sample below for the United Brothers option:

(3 X 30%) + (4 X 50%) + (3 X 20%) = 3.5

Now Omar has a clear evaluation for all his options, it’s clear that Plexi Office meets most of his criteria. 

Pros and Cons

The tool allows you to work with a large number of decision criteria, in a simple manner. Since the evaluation is based on opinions and approximate information, the method can be inaccurate and subjective. 

 

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