Decision Matrix Analysis: the Basics and a Template
Decision Matrix Analysis: this article explains the Decision Matrix Analysis in a practical way. After reading it, you will understand the basics of this powerful decision making method. This article also contains a downloadable and editable Decision Matrix Analysis template.
What is a Decision Matrix Analysis?
Within organisations it is not always easy to make the right decision with each other. Especially if a specific package of requirements is available and different factors must be taken into account. This means that a new contract for ICT support, for example, is not easily completed.
It has to meet a lot of requirements, before choosing from different suppliers. A complete so-called ‘vendor rating’ package comes into play. Not only price, but also conditions, contract duration, support, service, expertise and training for the staff will be important values for making the right decision.
The Decision Matrix Analysis is a simple answer to ensure that, when making the best decision, all these different factors are taken into account.
Alternatives of the Decision Matrix Analysis
This makes the Decision Matrix Analysis very useful for counting all the alternatives that exist in making the final decision. Especially when there is no clear preferred option, the Decision Matrix Analysis leads the facts that exist and the requirements that the organisation considers important.
As a result, a good rational decision can be made, which all parties involved fully agree with.
Application of the Decision Matrix Analysis
The Decision Making Analysis is characterised by making the factors and the alternative choices visually clear. The horizontal rows show potential options and the vertical columns the different factors. Weights are added to these factors; the most decisive factor for the organisation is the highest figure.
One may determine in advance that 1 counts as least important and increases up to 5 in gradation, which is considered very important. The following steps make the process clear:
Step 1: Drawing the matrix
On a large sheet of paper or on whiteboard, a matrix is drawn with an x number of rows and an x number of columns. All factors/criteria are placed in the rows; if there are 4 there will be 4 dedicated rows. All choices/options are then visualized in the columns; if there are 3 choices / options, then there are 3 columns.
Alternative setup Depending on the number of factors and options, you can also choose to flip the contents of the rows and columns. In that case, the factors are placed in the columns and the choices in the rows.
In this explanation and the upcoming example, however, we will stick to the setup as mentioned in the previous paragraph.
Step 2: Assigning scores to each option
The various factors are now examined for each option. If a factor scores very well, there will be a 5 here. If a factor is very bad, a 1 is entered.
Step 3: Determining weightings
In this step, weightings are assigned to the different factors. If ‘contract duration’ is very important to the organisation, this will get a 5. If the price is less important to the organisation, this will receive a 1.
Step 4: Calculate weighted scores
The weightings from step 3 are then multiplied by the digits entered in the matrix in step 2. This will result in a weighted score.
Step 5: Calculate final scores
As a final step, all the weighted scores calculated in step 4 are added to the bottom of each column. The choice with the highest score wins. If there are two choice options with the same final score, the organisation would do well to re-examine the various factors and perhaps assign new weightings. From there, the matrix can be re-entered with only the two remaining choice options.
Tip: When alternatives need to be compared against a reference option, the PUGH Matrix can be a useful addition to a standard decision matrix.
Decision Matrix Analysis example
In this example, an office considers it important that all 150 employees receive a daily supply of fresh fruit. This is not only tasty, but also provides energy and healthy nutrients.
Management has already consulted with various suppliers and has come up with 4 possible options.
In addition, management decided that there are a number of factors that should be considered and taken into account in the choice:
- Budget € 3 per person per week = max. €450 per week (5)
- Quality A; the best of the best, but ripe and instantly edible (4)
- 2x delivery per week in 5 baskets; easy to distribute across departments and always delivered fresh (4)
- Weekly list of options (2)
- Payment options – 1x per month an invoice (2)
Behind each factor, management has set the relative weighting of importance, which is important later when making the decision; 0 = not important, 1 = somewhat unimportant, 2 = moderate, 3 = neutral, 4 = important, 5 = very important.
Management starts by drawing a table, in which the factors are included in the top of the columns and the various suppliers are placed in the rows, where they are potentially linked to the factors (package of requirements). A short explanation can also be included in the matrix:
Each supplier is given a figure that indicates to what extent the factor is met. This is to a degree of 1 (not at all) to 5 (excellent).
Decision Matrix Analysis template
Start listing and evaluating the alternatives you have and get to the best decisions with this ready to use Decision Matrix Analysis template.
Download the Decision Matrix Analysis template
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Recommended books and publications on the decision matrix
A Decision Matrix Analysis helps compare options in a structured way. This is particularly useful when multiple criteria are considered simultaneously, such as cost, quality, risk, feasibility, or support. The books and publications listed below provide additional insight into multi-criteria decision-making, weighted criteria, rational decision-making processes, AHP, SMART, TOPSIS, and practical decision-making in organizations.
- Belton, V., & Stewart, T. J. (2002). Multiple criteria decision analysis: An integrated approach. Boston, MA: Springer. → This book provides a strong foundation for multi-criteria decision-making. It demonstrates how different criteria, interests, and alternatives can be systematically weighed. As a result, this resource aligns well with the decision matrix, where choices are not based on a single factor but on a combination of weighted criteria.
- Bouyssou, D. (1990). Building criteria: A prerequisite for MCDA. In C. A. Bana e Costa (Ed.), Readings in multiple criteria decision aid (pp. 58-80). Berlin, Germany: Springer. → This publication demonstrates why sound criteria form the foundation of every decision matrix. When criteria are unclear, ambiguous, or too broad, the outcome becomes less reliable. The source is therefore useful for readers who wish to understand why formulating criteria is at least as important as assigning scores.
- Edwards, W. (1977). How to use multiattribute utility measurement for social decisionmaking. IEEE Transactions on Systems, Man, and Cybernetics, 7(5), 326-340. → Edwards discusses how choices with multiple characteristics can be evaluated. This aligns well with the decision matrix, because alternatives are often not better or worse in just one respect. For example, one option might be cheaper but less flexible. It is precisely in such cases that a structured evaluation helps.
- Goodwin, P., & Wright, G. (2014). Decision analysis for management judgment. Chichester, England: Wiley. → A practical book on decision-making in management situations. It covers topics such as uncertainty, preferences, risks, and judgment errors. This is valuable for the decision matrix because it shows that a good choice is not just about calculations, but also about clear thinking and conscious assumptions.
- Hwang, C. L., & Yoon, K. (1981). Multiple attribute decision making: Methods and applications. Berlin, Germany: Springer. → This source is important in multi-criteria decision making and introduces methods such as TOPSIS. The publication helps place the decision matrix within a broader methodological context. Especially when alternatives are closely matched, more structured methods can help clarify differences.
- Keeney, R. L. (1992). Value-focused thinking: A path to creative decision-making. Cambridge, MA: Harvard University Press. → Keeney emphasizes that good decision-making starts with values and goals, not with the options that happen to be on the table. This is relevant to the decision matrix, because criteria must always stem from what is truly important. Otherwise, calculations may be done neatly, but based on incorrect or superficial standards.
- Keeney, R. L., & Raiffa, H. (1976). Decisions with multiple objectives: Preferences and value tradeoffs. New York, NY: Wiley. → This classic work deals with choices involving multiple objectives simultaneously. The source is useful because a decision matrix is often used precisely in such situations: when weighing price, quality, speed, risk, and other factors. The book helps to better understand how preferences and trade-offs play a role.
- Lootsma, F. A. (1999). Multi-criteria decision analysis via ratio and difference judgement. Dordrecht, Netherlands: Springer. → Lootsma delves deeper into the evaluation and comparison of alternatives using multiple criteria. The source is particularly relevant when scores are not simply objective but are based on expert estimates or group assessments. This is common in practice when filling out a decision matrix.
- Roy, B. (1996). Multicriteria methodology for decision aiding. Dordrecht, Netherlands: Kluwer Academic Publishers. → Roy demonstrates that multi-criteria decision-making is not always about a single, simple total score. Sometimes preferences, boundaries, and exceptions are important. This makes this source valuable for in-depth study: a decision matrix provides an overview, but the outcome must always be critically discussed.
- Saaty, T. L. (1980). The Analytic Hierarchy Process: Planning, Priority Setting, Resource Allocation. New York, NY: McGraw-Hill. → Saaty introduces the Analytic Hierarchy Process, a well-known method for weighing criteria and alternatives through pairwise comparisons. This aligns well with the decision matrix, especially when it is difficult to immediately determine which criterion should carry more weight than another.
- Triantaphyllou, E., & Mann, S. H. (1995). Using the analytic hierarchy process for decision making in engineering applications: Some challenges. International Journal of Industrial Engineering, 2(1), 35-44. → This article demonstrates how AHP is used in technical and organizational decision-making. The source is useful because it also highlights points of consideration. A method can be helpful, but the quality of the outcome remains dependent on the chosen criteria, the scores, and the way in which stakeholders arrive at their judgments.
- Wang, J. J., Jing, Y. Y., Zhang, C. F., & Zhao, J. H. (2009). Review on multi-criteria decision analysis aid in sustainable energy decision-making. Renewable and Sustainable Energy Reviews, 13(9), 2263-2278. → This review demonstrates how multi-criteria decision-making is applied to complex choices in sustainable energy. This is valuable for the decision matrix because it shows that the method is suitable not only for simple choices but also for situations where technical, financial, social, and environmental factors converge.
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Published on: June 26, 2018 | Last update: May 18, 2026
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2 responses to “Decision Matrix Analysis: the Basics and a Template”
In Step 1 of the application do you have the columns and rows the wrong way around? The factors in the graphic are in the rows and the choices are in the columns? Just an observation and want to make sure i am understanding it correctly. Thanks
Hi Jack, thank you for your question. Step 1 is correct. If you follow the example in the article, you will see that the factors are within the rows and the choices are the head of the columns and head of the rows.