Assignment: Car Buying

A close friend of yours is in the market to buy a car. Right after he collects all the facts but before he has a chance to analyze them and make a decision, there is an emergency in his family and he has to leave town at once. But he needs to buy the car as soon as he returns; he will not have any time to analyze the data upon his return.

He has narrowed down the choice to two alternatives: Car A1 and car A2. He gives you all the facts (below) and asks you to make the decision for him exclusively based on his criteria and the facts he has collected about them. But he asks you to justify your decision later on by explaining the process that led you to your choice. He asks you to stick to his criteria/facts and NOT use any of your own personal preferences/facts.

His criteria are: The number of people the car can accommodate (ideally 7), price (ideally $10,000; the maximum he can afford to spend is $30,000), and MPG – miles per gallon (ideally 30). He places 25% priority (weight) on price, 40% on MPG, and 35% on roominess.

The facts are:

• Car A1 can accommodate 5 people, costs $18,000 and gets 20 MPG.
• Car A2 can accommodate 6 people, costs $16,000 and gets 18 MPG.

1. Which car would you choose for him? Why? Fully explain and justify your decision process.
2. “People make the right decision only if they have the right information. Information is the only ingredient required for making decisions.” Based on this assignment, do you agree with this statement?

Note: this assignment is not about cars or car buying! It is about decision analysis, the role played by information, and the extent to which a particular decision may or may not be structurable.