Capital Planning and Budgeting
You can now calculate a score for each project, based on the weighted criteria, using the following formula:
project score = (criteria1 weight*criteria1 score) + (criteria2 weight*criteria2 score) + (criteria3 weight *criteria3 score)....+ (criteriaN weight *criteriaN score)
The table below shows the project scores for each of our projects:
|Safety (w=10)||Cost (w=7)||Community Support (w=2)||Project Score|
You can then prioritize your projects based on their project scores.
This system can help choose between different alternatives for individual capital acquisitions, as well. For instance, in replacing a snowplow, your criteria may be purchase cost, fuel-efficiency and estimated cost of maintenance. These criteria are weighted and then each alternative plow is scored on each of the criteria, and the total equipment score is calculated.
We have provided an Excel spreadsheet to assist you with this process. Download it here.