Question

1) Three new-product ideas have been suggested. These ideas have been rated as shown in the Table below

	Product*
Criteria	A	B	C	Weight (%)
Development cost	P	F	VG	10
Sales prospects	VG	E	G	15
Producibility	P	F	G	10
Competitive advantage	E	VG	F	15
Technical risk	P	F	VG	20
Patent protection	F	F	VG	10
Compatibility with strategy	VG	F	F	20
				100
* P = poor, F = fair, G = good, VG = very good, E = excellent

1. Using an equal point spread for all five ratings (i.e., P = 1 , F = 2 , G = 3 , VG = 4 , E = 5 P=1, F=2, G=3, VG=4, E=5), determine a weighted score for each product idea. What is the ranking of the three products?
2. Rank the criteria, compute the rank-sum weights, and determine the score for each alternative. Do the same using the rank reciprocal weights.
3. What are some of the advantages and disadvantages of this method of product selection?

2. Using MAUT and the AHP, perform an analysis to select a graduate program. Explain your assumptions and indicate which technique you believe is most appropriate for this application.

Answer 1

a) Construct the score table as below:

	Product
Criteria	A	B	C	Weight (%)
Development cost	1	2	4	10
Sales prospects	4	5	3	15
Pmducibility	1	2	3	10
Competitive advantage	5	4	2	15
Technical risk	1	2	4	20
Patent protection	2	2	4	10
Compatibility with strategy	4	2	2	20
				100

Weighted score for product A =(1*10+4*15+1*10+5*15+1*20+2*10+4*20)/100 = 2.75

Weighted score for product B =(2*10+5*15+2*10+4*15+2*20+2*10+2*20)/100 = 2.75

Weighted score for product C =(4*10+3*15+3*10+2*15+4*20+4*10+2*20)/100 = 3.05

Based on weighted score, Rank of product C is 1 and of A and B is 2.

b) Rank of criteria 5 and 7 is 1. Rank of criteria 2 and 4 is 3, of 1,3,6 is 3.

Total number of objectives, K = 7

For criterion 1, (K-rj+1) = (7-3+1) = 5

Weighted score for product A =(1*0.122+4*0.146+1*0.122+5*0.146+1*0.171+2*0.122+4*0.171) = 2.657

Weighted score for product B =(2*0.122+5*0.146+2*0.122+4*0.146+2*0.171+2*0.122+2*0.171) = 2.730

Weighted score for product C =(4*0.122+3*0.146+3*0.122+2*0.146+4*0.171+4*0.122+2*0.171) = 3.098

2. MAUT is the acronym for multiple-attribute utility theory. This particular theory employs a function called utility. The utility directs to fill in a value that is associated with a parameter for exhibiting the level of satisfaction to the decision maker. The values are assigned directly. The criterion which manifests the highest level of satisfaction is attributed to the value of 1. The lowest level of satisfaction is assigned 0.

AHP is the acronym for analytical hierarchy process. This particular theory resolves the problem pertaining to decision-making by dividing the main problem into a hierarchy of independent sub category of problems at various levels.

Decision-making has been made easier with the help of these aforementioned techniques.

Explanation:

MAUT is the acronym for multiple-attribute utility theory. This particular theory employs a function called utility. The utility directs to fill in a value that is associated with a parameter for exhibiting the level of satisfaction to the decision maker. The values are assigned directly. The criterion which manifests the highest level of satisfaction is attributed to the value of 1. The lowest level of satisfaction is assigned 0.Thus, multiple-attribute utility theory amalgamates a group of psychological quantification models and scaling methods that can be employed to evaluate the alternatives that come with various value relevant attributes.

AHP is the acronym for analytical hierarchy process. This particular theory resolves the problem pertaining to decision-making by dividing the main problem into a hierarchy of independent sub categories of problems at various levels. Under this system of decision-making, the parameters and options are compared together in pairs by employing comparison matrices. The fundamental scale of Saaty is employed.

According to my judgment, the multiple-attribute utility theory is apt for making a decision regarding the selection of a graduate program. The multiple-attribute utility theory employs a function called utility. The utility directs to fill in a value that is associated with a parameter for exhibiting the level of satisfaction to the decision maker. The values are assigned directly. The criterion which manifests the highest level of satisfaction is attributed to the value of 1. The lowest level of satisfaction is assigned 0. If we apply this method to the process of graduate program selection, the criteria for selecting a particular program which provides the highest level of satisfaction should be listed and considered as an option. In this way, we can rule out the criteria which provide the lowest level of satisfaction and reach to a sagacious decision.