A Company Is About to Select a Vendor for the Outsourcing

question 61

Essay

A company is about to select a vendor for the outsourcing of all of its waste management needs. It has identified four criteria critical to the selection. These criteria, and their importance weights, appear below. Three vendors and their scores are listed below. Which vendor has the highest composite score?
$$\begin{array} { | l | r | r | r | r | } \hline & \text { Weight } & \text { Vendor 1 } & \text { Vendor 2 } & \text { Vendor 3 } \\\hline \text { Criteria 1 } & 0.37 & 8 & 9 & 8 \\\hline \text { Criteria 2 } & 0.23 & 5 & 9 & 7 \\\hline \text { Criteria 3 } & 0.24 & 7 & 1 & 6 \\\hline \text { Criteria 4 } & 0.16 & 4 & 4 & 3 \\\hline\end{array}$$

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Definitions:

S&P E-Mini Futures

Futures contracts that represent a portion of the standard S&P futures contracts, allowing for investment in the S&P 500 with less capital.

Listed Price

The price at which a product, security, or asset is listed for sale.

Futures Contract

A standardized legal agreement to buy or sell an asset at a predetermined price at a specified time in the future.

Portfolio's Beta

A measure of a portfolio's sensitivity to market movements, indicating how much the portfolio's value is expected to change with a change in the overall market.