Choice: Making the Trade-Offs

8/14/2019 Choice: Making the Trade-Offs

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Choice: Making the Trade-Offs

What makeschoosing sodifficult?


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So what do you do?

First eliminate all alternatives thatdont meet your must criteria

The Gibsons New Home The Gibsons House Purchase

Musts:Down payment


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Must criteria analysis

Musts H ou se A H ous e B H ou se C

Down Payment


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Dominated Alternatives& Even Swaps

The Dominated Alternativestechnique eliminates inferioralternatives.

If alternative A is better than alternativeB on some objectives & no worse thanB on all other objectives, B can beeliminated.

Weekend Getaway

GetawayA

GetawayB

GetawayC

GetawayD

GetawayE

Lowcost

$450 $500 $500 $450 $500

Goodweather

Warm,possiblerain

Warm &sunny

Cold Cool Cold

Short

traveltime

3 h ou rs 3 h ou rs 3 h ou rs 3 h ou rs 2 .5

hours

Weekend Getaway

GetawayA

GetawayB

GetawayC

GetawayD

GetawayE

Lowcost

$450 $500 $500 $450 $500

Goodweather

Warm,possiblerain

Warm &sunny

Cold Cool Cold

Short

traveltime

3 h ou rs 3 h ou rs 3 h ou rs 3 h ou rs 2 .5

hours

Practical dominance: a slight advantageon one objective does not outweigh thedisadvantages on the other factors


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Continental United

Cost of

Airfare

$900 $1,000

FrequentFlier

Miles

None 2,000

Even Swaps

3.Make the even

swap

Continental United

Cost of

Airfare

$900 $1,000

FrequentFlier

Miles

None 2,000

Even Swaps

What are frequent flyer miles worthto you?

Continental United

Cost of

Airfare

$900 $1,000

FrequentFlier

Miles

None 2,000

Even Swaps

If FF Miles = $50, then United ticketcan be reduced to $950

$950

Continental United

Cost ofAirfare

$900 $1,000

FrequentFlier

Miles

None 2,000

Even Swaps


$850

Continental United

Cost ofAirfare

$900 $1,000

FrequentFlier

Miles

None 2,000

Even Swaps


$900

Lets look atAlans officedecision


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Objectives Parkway Lombard Baranov Montana Pierpoint

AlansCommute

45 m in 2 5 m in 2 0 m in 25 m in 3 0 m in

ClientAccess 50% 80% 70% 85% 75%

OfficeServices

A B C A C

OfficeSize 800 sq ft 700 sq ft 500 sq ft 950 sq ft 700 sq ft

MonthlyCost $ 1, 85 0 $ 1, 70 0 $ 1, 50 0 $ 1, 90 0 $ 1, 75 0

Alternatives

Alans Office Decision


AlansCommute

45 m in 2 5 m in 2 0 m in 2 5 m in 3 0 m in

ClientAccess 50% 80% 70% 85% 75%

OfficeServices

A B C A C

Office Size 800 sq ft 700 sq ft 500 sq ft 950 sq ft 700 sq ft

MonthlyCost $ 1, 85 0 $ 1, 70 0 $ 1, 50 0 $ 1, 90 0 $ 1, 75 0

Alternatives

Rank alternatives on each objective


AlansCommute

5 2 (tie) 1 2 (tie) 4

ClientAccess 5 2 4 1 3

OfficeServices

1 (tie) 3 4 (tie) 1 (tie) 4 (tie)

OfficeSize 2 3 (tie) 5 1 3 (tie)

MonthlyCost 4 2 1 5 3

Alternatives

Rank alternatives on each objective


AlansCommute

5 2 (tie) 1 2 (tie) 4


OfficeServices

1 (tie) 3 4 (tie) 1 (tie) 4 (tie)



Alternatives

Rank alternatives on each objectiveLook for Dominated Alternatives


AlansCommute

5 2 (tie) 1 2 (tie) 4


OfficeServices

1 (tie) 3 4 (tie) 1 (tie) 4 (tie)

Office Size 2 3 (tie) 5 1 3 (tie)


Alternatives



AlansCommute

5 2 (tie) 1 2 (tie) 4


OfficeServices

1 (tie) 3 4 (tie) 1 (tie) 4 (tie)



Alternatives



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AlansCommute

5 2 (tie) 1 2 (tie) 4


OfficeServices

1 (tie) 3 4 (tie) 1 (tie) 4 (tie)



Alternatives



AlansCommute

45 m in 2 5 m in 2 0 m in 2 5 m in 3 0 m in

ClientAccess 50% 80% 70% 85% 75%

OfficeServices

A B C A C

Office Size 800 sq ft 700 sq ft 500 sq ft 950 sq ft 700 sq ft

MonthlyCost $ 1, 85 0 $ 1, 70 0 $ 1, 50 0 $ 1, 90 0 $ 1, 75 0

Alternatives



AlansCommute

4 5 m in 2 5 m in 2 0 m in 2 5 m in 3 0 m in

ClientAccess 50% 80% 70% 85% 75%

OfficeServices

A B C A C


MonthlyCost $ 1, 85 0 $ 1, 70 0 $ 1, 50 0 $ 1, 90 0 $ 1, 75 0

Alternatives

$50 = 150 square feet


Objectives Lombard Baranov Montana

AlansCommute

2 5 mi n 2 0 m in 2 5 mi n

ClientAccess80% 70% 85%

OfficeServices

B C

B

A

B

OfficeSize 700 sq f t 500 sq f t 950 sq f t

MonthlyCost$ 1, 70 0 $ 1, 50 0

$1,750

$1,900

$1,800

Now look for even swaps


AlansCommute

25 min 2 0 min 25 min


OfficeServices

B C

B

A

B

Office Size 700 sq f t 500 sq f t 950 sq f t

MonthlyCost$ 1, 70 0 $ 1, 50 0

$1,750

$1,900

$1,800



AlansCommute

25 mi n 20 min 2 5 min


OfficeServices

B C

B

A

B


MonthlyCost$ 1, 70 0 $ 1, 50 0

$1,750

$1,900

$1,800


25 min

78%


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AlansCommute

2 5 mi n 2 0 m in 2 5 mi n


OfficeServices

B C

B

A

B


MonthlyCost$ 1, 70 0 $ 1, 50 0

$1,750

$1,900

$1,800


25 min

78%


AlansCommute

2 5 m in 2 0 m in

25 min

25 min

ClientAccess80% 70%

78%

85%

OfficeServices

B C A

Office Size 700 sq f t 500 sq f t 950 sq f t

MonthlyCost$ 1, 70 0 $ 1, 50 0

$1,750

$1,900



AlansCommute

2 5 m in 2 0 m in

25 min

25 min

ClientAccess80% 70%

78%

85%

OfficeServices

B C

B

A


MonthlyCost$ 1, 70 0 $ 1, 50 0 $ 1, 90 0


$1,750


AlansCommute

2 5 m in 2 0 m in

25 min

25 min

ClientAccess80% 70%

78%

85%

OfficeServices

B C

B

A


MonthlyCost$ 1, 70 0 $ 1, 50 0 $ 1, 90 0


$1,750 $1,850

B


ClientAccess80% 70%

78%

85%

Office Size 700 sq ft 500 sq ft 950 sq ft

MonthlyCost$ 1, 70 0 $ 1, 50 0

$1,750

$1,900

$1,800

Do we see any more dominatedalternatives?


ClientAccess2 3 1

Office Size 2 3 1

MonthlyCost1 2 3



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ClientAccess2 3 1

Office Size 2 3 1

MonthlyCost1 2 3


Objectives Lombard Montana

ClientAccess 80% 85%

Office Size700 sq ft 950 sq ft

MonthlyCost$ 1, 70 0 $ 1, 80 0

One more pass at even swaps



Office Size700 sq ft

950 sq ft

950 sq ft

MonthlyCost$ 1, 70 0 $ 1, 80 0




Office Size700 sq ft

950 sq ft

950 sq ft

MonthlyCost$1,700

$1,950

$1,800


PracticalAdvice

Make theeasiestswaps first


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Concentrateon theamount ofthe swap

Value an

incrementalchangebased onwhat youstart with

Seek outinformation

Practicemakesperfect

Weighted ScoringMust criteriaare absolute andcan not beweighted


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Must criteriaare absolute and

can not beweighted

Do not includeany mustcriteria in thisanalysis

First, establish

ImportanceScores for eachwant objective

Next, establish

AchievementScores for eachalternative oneach objective

Finally, calculateweighted scorefor eachalternative Objectives Parkway Lombard Baranov Montana Pierpoint

AlansCommute

4 5 m in 2 5 m in 2 0 m in 2 5 m in 3 0 m in

ClientAccess 50% 80% 70% 85% 75%

OfficeServices

A B C A C


MonthlyCost $ 1, 85 0 $ 1, 70 0 $ 1, 50 0 $ 1, 90 0 $ 1, 75 0

Alternatives

Alans Office DecisionWeighted Scoring

EstablishImportanceScores

Objectives ImportanceScore

Alans Commute 5

Client Access 10

Office Services 3

Office Size 7

Monthly Cost 8


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Objectives Parkway Lombard Baranov Montana PierpointAlans

Commute

45 min

2

25 min

8

20 min

10

25 min

8

30 min

6

ClientAccess50%

3

80%

8

70%

5

85%

10

75%

6

OfficeServices

A

10

B

7

C

3

A

10

C

3

OfficeSize800 sq ft

8

700 sq ft

7

500 sq ft

5

950 sq ft

10

700 sq ft

7

MonthlyCost$1,850

5

$1,700

9

$1,500

10

$1,900

3

$1,750

7

Establish Achievement Scores

P ar kw ay L om ba rd B ar an ov M on ta na P ie rp oi nt

I S AS To ta l A S To ta l A S To ta l A S To ta l A S To tal

AlansCommute

5 2 10 8 40 10 50 8 40 6 30

ClientAccess

10 3 30 8 80 5 50 10 100 6 60

OfficeServices

3 10 30 7 21 3 9 10 30 3 9

Office Size 7 8 56 7 49 5 35 10 70 7 49

MonthlyCost

8 5 40 8 64 10 80 3 24 7 56

TotalScore 166 254 224 264 204

Calculate weighted scores for eachalternative

Selecting an HRIS

What is the best human resourceinformation system for ourcompany?

Decision Statement

Regional EEO reporting

Producing management reports

Capturing & reporting salary & job history

Must Objectives Want Objectives

Able to implement in 6 months

Written in C

OSHA reporting capability

Turn-Around Document capability

Security


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Evaluate alternatives against mustcriteria

MustObjectives

Co. A

GO/NOGO

Co. B

GO/NOGO

Co C

GO/NOGO

Co. D

GO/NOGO

EEOReports

Yes Go Yes - Go Yes - Go Yes - Go

MgmtReports

Yes - Go Yes - Go Yes - Go No NoGo

Capture &ReportHistory

Yes - Go Yes - Go Yes - Go

Assign weights to want objectives(importance scores)

Criteria Weights

6 months toimplement

10

Written in C 9

OSHA reporting 8

Turn-arounddocument

5

Security 3

WantObjective

W ei gh t C o. A S co re C o. B S co re C o. C S co re

6 Mons.to

complete

10 Yes- 6months

9 Yes - ? 8 Yes 4months

10

Written inC

9 Yes subs

required

9 Yes subs +

req.

8 Yes- nosubs req.

10

OSHAReporting

8 Ye s - Mo stflexible

10 Yes Minimum

8 Yes - OK 9

Turnaround

5 Yes -Best

10 Yes -minimum

8 Yes - OK 9

Security 3 Yes -Best

1 0 M us t d oourselves

5 Li mi tedsecurity

7

Evaluate alternatives against wantcriteria (achievement scores)

Calculate total weighted scores

WantObjective

Weight Co. AScore

WeightedScore

Co. BScore

WeightedScore

Co. CScore

WeightedScore

6 Mons. tocomplete

10 9 90 8 80 10 100

Written inC

9 9 81 8 72 10 90

OSHAReporting

8 10 80 8 64 9 72

Turnaround

5 10 50 8 40 9 45

Security 3 10 30 5 15 7 21

Total 331 271 328

ScoringGroupDecisions:

Delphi

Method

Coordinator requests response

Coordinator receives individual responses

Coordinator determines:(a) Median response

(b) Range of middle 50% of answers

Coordinator requests explanationsfrom any expert whose estimate is

not in the middle 50%

Coordinator sends to all experts:(a) Median response

(b) Range of middle 50%(c) Explanations

DelphiMethod


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DelphiMethod:Strengths

Flexible Iterative

Allows timeto thinkbeforecommitment

Ensuresanonymity

Removespersonalinfluence


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Delphi Method:Weaknesses

Extremesensitivity

Assumesexperts willreformjudgments

High rates ofattrition

Monetarypayments maybias results

Risk ofspeciousconsensus


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Time consuming

The RogueDivision

Case

DelphiTechnique:

WeightedScoring

The RogueDivision

Case

See Delphischedule

Are we done yet?

No, now we need to lookat uncertainty & risk

Choice: Making the Trade-Offs

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