Exercise 6.3 from Value added decision making for Managers by Kenneth R. Chelst

Reference Exercise 5.8

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6.3 b. Determine the sensitivity of the optimal decision to the will Cell phone plans (see Exercise 5.8) Create objectives and measures to be used in evaluat- ing cell phone plans from multiple providers. Gather data for various cell phone plans Determine the range for each measure. Use the SMART method to assign weights to each measure a. Determine the optimal decision using Logical Decisions software. b. Determine the sensitivity of the optimal decision to weights assigned to the two highest weighted measures TABLE 6.16: Incandescent bulb alternatives for home. Bulb Total Annual Total Bulb Total Annual (W) Operating Cost ($) Purchasing Cost ($) Cost ($) 180 189 235 100 300 15 315 225 10 TABLE 6.17: Incandescent bulb alternatives for hotels. Bulb Total Annual Total Bulb Total Annual (W) Operating Cost (S) Purchasing Cost ($) Cost (5) 60 18,000 900 18.900 22.500 1000 23,500 30,000 1500 31,500 100 Value and Risk Management for Multi-Objective Decisions 199 Create a stacked bar chart and describe the strengths and weaknesses of the various alternatives Create a pair-wise comparison chart of the two best alternatives. Create a hybrid solution that improves performance on one or more highly weighted asures of the best or second best alternatives. Increase the cost of that alternative to reflect the improved performance. How does this new alternative compare with the best cell phone on the original list? 6.3 b. Determine the sensitivity of the optimal decision to the will Cell phone plans (see Exercise 5.8) Create objectives and measures to be used in evaluat- ing cell phone plans from multiple providers. Gather data for various cell phone plans Determine the range for each measure. Use the SMART method to assign weights to each measure a. Determine the optimal decision using Logical Decisions software. b. Determine the sensitivity of the optimal decision to weights assigned to the two highest weighted measures TABLE 6.16: Incandescent bulb alternatives for home. Bulb Total Annual Total Bulb Total Annual (W) Operating Cost ($) Purchasing Cost ($) Cost ($) 180 189 235 100 300 15 315 225 10 TABLE 6.17: Incandescent bulb alternatives for hotels. Bulb Total Annual Total Bulb Total Annual (W) Operating Cost (S) Purchasing Cost ($) Cost (5) 60 18,000 900 18.900 22.500 1000 23,500 30,000 1500 31,500 100 Value and Risk Management for Multi-Objective Decisions 199 Create a stacked bar chart and describe the strengths and weaknesses of the various alternatives Create a pair-wise comparison chart of the two best alternatives. Create a hybrid solution that improves performance on one or more highly weighted asures of the best or second best alternatives. Increase the cost of that alternative to reflect the improved performance. How does this new alternative compare with the best cell phone on the original list