I have the following variables that i am going to use to calculate a weighted average:

Variable    Format           Weight applied (out of 1)
A          Percentage        0.2
B          Percentage        0.1
C          Percentage        0.1
D          Percentage        0.3
E          Ratio             0.2
F          Ratio             0.1

Using the following guidelines:

"There are two main components we'll look at to model your decision. 1. You have to measure all criteria on similar numerical scales (to compare apples to apples), and 2. You have to assign your importance (weights) to those criteria that will be used to rank the ..... Once you have these two components, you can calculate a weighted average."

Here are my options:

Option A

Since 4 (A, B, C, D) of my numerical scales are similar already, a percentage value (scale 0-100), my immediate thought is to convert E and F from a ratio to a percentage (multiplying by 100). However the concern i have is that the percentage value may be negative AND/OR greater than 100% in some cases, suggesting an unbalanced relationship between the variables.

Option B

Since similar scales are required for all variables i would need to find the MIN and MAX values values do change over time) for each variable, in order to determine an overall scale to use. Under these conditions there will never be a negative value or a value that potentially exceeds the scale.

Can anyone see a potential flaw in Option A? If there is a flaw, is Option B the correct way to approach?


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