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338 Resource allocation and negotiation problems
Table 13.2 – Values of strategies with each benefit measured on common scale
Strategies
Costs
($m) Profits
Benefits
Market
share Risk
NORTH REGION
(1) Reduce to three outlets 12 27.27 0 10
(2) Status quo
WEST REGION
28 0 70 0
(1) Close down operation −14 39.39 0 20
(2) Status quo 7 21.27 15 12
(3) Expand to six outlets
EAST REGION
16 0 50 0
(1) Status quo 2 100 0 100
(2) Expand to four outlets 25 91 25 70
(3) Expand to 10 outlets
SOUTH REGION
40 0 100 0
(1) Status quo 20 90.91 0 30
(2) Expand to 16 outlets 25 45.46 48 12
(3) Add three town center outlets 45 0 60 0
achieved by the switch they had previously identified in the East region.
Hence ‘Market share’ in the North was allocated a within-criterion
weight of 70. The weights for South and West regions were assessed in
the same way. A similar approach was used to elicit the within-criterion
weights for ‘Risk’.
Each benefit now had a common scale which enabled the effect on that
benefit of choosing a particular package to be measured. Table 13.2 shows
the values of the various strategies measured on these common scales.
Comparing the relative importance of the benefits
Obviously, the managers wanted to be able to assess the overall benefit
of using a particular package by combining the values for all three
benefits. This meant that they now had to determine a set of weights
which would allow one benefit to be compared with the others. These
weights could be obtained by directly assessing the relative importance
of each benefit, but, as we pointed out in Chapter 3, a better method
is to compare the importance of a change (or swing) from the worst
position to the best position on one benefit scale with a similar swing on