Multiple criteria decision analysis - Math Problem Example

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Therefore, he decides to use MCDA to help him select the best bank. He therefore lists the important factor to consider when selecting the bank as: - 1) interest rate 2) Flexibility in…
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Download file to see previous pages In connection to this he decided to visit the top three largest banks. He began with imperial bank, Imperial bank was offering the mortgage at 15% interest. However, the owner of the facility has to contribute 10 % of the amount he is requesting. However, the interest rate is not constant, it will be changing in accordance with the rates of the Central Bank. Barclays Bank was offering an interest rate of 10 %, this rate was constant, however, the owner of the facility has to contribute 10 % of the facility and then the bank will take the responsibility of purchasing the building materials for the owner. The final bank was, Finlay Bank, was offering 12 % interest rate loan, however in case the of permanent disability or death then the borrowed amount will be waivered.
Bernard has a difficulty in deciding which bank to take the mortgage with, therefore he has decided to use multiple criteria decision analysis (MCDA) to solve the problem. In connection to this he has listed the most important factors to consider: - 1) interest rate 2) Flexibility in payments 3) duration 4) Guarantees.
CMDA is an important analytical tool that can be used to solve problems especially when someone is in a dilemma (Marie 2010, pg. 14). The tool has all the important qualities of a decisive tool. It is basically used to (Adams 2009, pg. 26);
Data collection; He went to the internet and found out that the most important factors to consider when taking a mortgage are: Legal costs, Valuation, mortgage arrangement fees, mortgage rates, portability, and mortgage related insurance (Jones 2006, pg. 47).
Now that the problem has been identified as interest rate, valuation fees, mortgage arrangement fees, and insurance fees. In this connection, the next step is Bernard to understand the relationship between these factors.
From the diagram we see that the only bank that is offering alternatives to mortgage is Imperial bank. The alternatives that the ...Download file to see next pagesRead More
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