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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
If FF Miles = $150, then United ticketcan be reduced to $850
$850
Continental United
Cost ofAirfare
$900 $1,000
FrequentFlier
Miles
None 2,000
Even Swaps
If FF Miles = $100, then United ticketcan be reduced to $900
$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
Objectives Parkway Lombard Baranov Montana Pierpoint
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
Objectives Parkway Lombard Baranov Montana Pierpoint
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
Objectives Parkway Lombard Baranov Montana Pierpoint
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 objectiveLook for Dominated Alternatives
Objectives Parkway Lombard Baranov Montana Pierpoint
AlansCommute
5 2 (tie) 1 2 (tie) 4
ClientAccess 5 2 4 1 3
OfficeServices
1 (tie) 3 4 (tie) 1 (tie) 4 (tie)
Office Size 2 3 (tie) 5 1 3 (tie)
MonthlyCost 4 2 1 5 3
Alternatives
Rank alternatives on each objectiveLook for Dominated Alternatives
Objectives Parkway Lombard Baranov Montana Pierpoint
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 objectiveLook for Dominated Alternatives
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Objectives Parkway Lombard Baranov Montana Pierpoint
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 objectiveLook for Dominated Alternatives
Objectives Parkway Lombard Baranov Montana Pierpoint
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 objectiveLook for Dominated Alternatives
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
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
$50 = 150 square feet
Rank alternatives on each objectiveLook for Dominated Alternatives
Objectives Lombard Baranov Montana
AlansCommute
2 5 mi n 2 0 m in 2 5 mi n
ClientAccess80% 70% 85%
OfficeServices
B C
B
A
B
OfficeSize 700 sq f t 500 sq f t 950 sq f t
MonthlyCost$ 1, 70 0 $ 1, 50 0
$1,750
$1,900
$1,800
Now look for even swaps
Objectives Lombard Baranov Montana
AlansCommute
25 min 2 0 min 25 min
ClientAccess80% 70% 85%
OfficeServices
B C
B
A
B
Office Size 700 sq f t 500 sq f t 950 sq f t
MonthlyCost$ 1, 70 0 $ 1, 50 0
$1,750
$1,900
$1,800
Now look for even swaps
Objectives Lombard Baranov Montana
AlansCommute
25 mi n 20 min 2 5 min
ClientAccess80% 70% 85%
OfficeServices
B C
B
A
B
OfficeSize 700 sq f t 500 sq f t 950 sq f t
MonthlyCost$ 1, 70 0 $ 1, 50 0
$1,750
$1,900
$1,800
Now look for even swaps
25 min
78%
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Objectives Lombard Baranov Montana
AlansCommute
2 5 mi n 2 0 m in 2 5 mi n
ClientAccess80% 70% 85%
OfficeServices
B C
B
A
B
OfficeSize 700 sq f t 500 sq f t 950 sq f t
MonthlyCost$ 1, 70 0 $ 1, 50 0
$1,750
$1,900
$1,800
Now look for even swaps
25 min
78%
Objectives Lombard Baranov Montana
AlansCommute
2 5 m in 2 0 m in
25 min
25 min
ClientAccess80% 70%
78%
85%
OfficeServices
B C A
Office Size 700 sq f t 500 sq f t 950 sq f t
MonthlyCost$ 1, 70 0 $ 1, 50 0
$1,750
$1,900
Now look for even swaps
Objectives Lombard Baranov Montana
AlansCommute
2 5 m in 2 0 m in
25 min
25 min
ClientAccess80% 70%
78%
85%
OfficeServices
B C
B
A
OfficeSize 700 sq f t 500 sq f t 950 sq f t
MonthlyCost$ 1, 70 0 $ 1, 50 0 $ 1, 90 0
Now look for even swaps
$1,750
Objectives Lombard Baranov Montana
AlansCommute
2 5 m in 2 0 m in
25 min
25 min
ClientAccess80% 70%
78%
85%
OfficeServices
B C
B
A
OfficeSize 700 sq f t 500 sq f t 950 sq f t
MonthlyCost$ 1, 70 0 $ 1, 50 0 $ 1, 90 0
Now look for even swaps
$1,750 $1,850
B
Objectives Lombard Baranov Montana
ClientAccess80% 70%
78%
85%
Office Size 700 sq ft 500 sq ft 950 sq ft
MonthlyCost$ 1, 70 0 $ 1, 50 0
$1,750
$1,900
$1,800
Do we see any more dominatedalternatives?
Objectives Lombard Baranov Montana
ClientAccess2 3 1
Office Size 2 3 1
MonthlyCost1 2 3
Do we see any more dominatedalternatives?
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Objectives Lombard Baranov Montana
ClientAccess2 3 1
Office Size 2 3 1
MonthlyCost1 2 3
Do we see any more dominatedalternatives?
Objectives Lombard Montana
ClientAccess 80% 85%
Office Size700 sq ft 950 sq ft
MonthlyCost$ 1, 70 0 $ 1, 80 0
One more pass at even swaps
Objectives Lombard Montana
ClientAccess 80% 85%
Office Size700 sq ft
950 sq ft
950 sq ft
MonthlyCost$ 1, 70 0 $ 1, 80 0
One more pass at even swaps
Objectives Lombard Montana
ClientAccess 80% 85%
Office Size700 sq ft
950 sq ft
950 sq ft
MonthlyCost$1,700
$1,950
$1,800
One more pass at even swaps
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
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 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
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