DECISION MATRIX EXAMPLE:

BUYING A NEW CAR

Let’s say you are looking to buy a new car. Decision Matrix is a perfect tool to ensure that the decision you are making is sound and objective. This guide will take you step-by-step through the process:

STEP 1: DEFINE YOUR OPTIONS

You are doing well in life, so you are choosing between these nice vehicles:

  1. BMW 3 Series

  2. Tesla Model S

  3. Audi A4

 

STEP 2: DEFINE YOUR CRITERIA

There are a handful of attributes or criteria that you would consider relevant to your selection of a vehicle. Specifically, you are going to base your decision on the following criteria:

  1. Cost

  2. Comfort

  3. Speed

STEP 3: EVALUATE YOUR OPTIONS BASED ON THE CRITERIA

At this point, the basic decision matrix is set and we need to evaluate how well each one of the options (cars) satisfies each of our considerations (criteria). Here is how you might think through your evaluation of Tesla Model 3:

  • Cost- With all bells and whistles, it is the most expensive car on the list (1)

  • Comfort - You tend to prefer more familiar styling as opposed to space-age minimalism (2)

  • Speed/Acceleration - Puts everyone else to shame (5)

The rest of the cars get their own, respective, values on these. The hypothetical table, then, would look like this:

 

 

 

 

 

 


 

 

STEP 4: ASSIGN WEIGHTS TO YOUR CRITERIA (OPTIONAL)

Chances are, not all of these criteria are equally important to you, so you need to assign the weight to each of these criteria. After thinking through, you have decided that this is how your priorities break down:

  1. Price – The most important factor. You don’t want to overspend. WEIGHT 5

  2. Comfort – Middle of the road attribute. You can live without it. WEIGHT 2

  3. Safety – Somewhat important. You like going fast. WEIGHT 3

 

Once the Criteria Weights dialed in we multiply those weights by the Criteria Scores and sum up those scores for each alternative. In the end, it looks like this:

 

And that's it - you are done! Congratulations on making a rational decision!

If you are interested in adjusting your own scores for this example, use our car-buying template.

CRITERIA                   BMW 3                  AUDI A4               TESLA M3

COST                               5                            3                             1

COMFORT                       3                            5                             2

SPEED                            1                            3                             5

TOTAL                             9                           11                            8

CRITERIA         WEIGHT            BMW 3                  AUDI A4               TESLA M3

COST                     5                       5                            3                             1

COMFORT             2                       3                            5                             2

SPEED                  3                       1                            2                             5

TOTAL                                           34                          29                           24

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