Swing weights and tradeoff(indifference) methods to calculate weights

A company is deciding what strategy to follow with respect to networking its personal

computers.

Evaluation Measure Alternatives

Productivity

improvement Xp

Cost Increase Xc Security Xs

Status Quo 0 0 0

High Quality/High

cost

2 125 0.5

Medium

Quality/Medium

Cost

1 95 0

Low Quality/low

cost

0.5 65 -1

Single dimension value of Xp is from -1 to 2, linear, 2 being the best

Single dimension value of Xc is from 0 to 150, linear, 0 being the best

Single dimension value of Xs is from -2 to 1, 1 being the best. Vs(-1)=0.5, Vs(0)=0.83, and piece

wise linear in between.

Calculate the weights on the measures using swing weights and tradeoff methods.

Swing weights

Tradeoffs (indifference methods)

First calculate the value function

Since it is linear for Xp and Xc use

For increasing function y-low/high-low

For decreasing function high-y/high-low

For Xs use piecewise linear function to find Vs(0.5)

Productivity

improvement

Xp

Cost Increase

Xc

Security Xs

Status Quo 0 0 0

High Quality/High cost 2 125 0.5

Medium

Quality/Medium Cost

1 95 0

Low Quality/low cost 0.5 65 -1

Converting to a scale eof 0-1

Productivity

improvement

Xp

Cost Increase

Xc

Security Xs

Status Quo 0.333333333 1 0.83

High Quality/High cost 1 0.166666667 0.92

Medium

Quality/Medium Cost

0.666666667 0.366666667 0.83

Low Quality/low cost 0.5 0.566666667 0.5

Alternatives Evaluation Measure

Alternatives Evaluation Measure

Next create 2 sets of 2 hypothetical alternatives and make them indifferent. Read below.