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The main stages of the analysis 339
Weight
100
0
30
Profit
100
Market
share
50
Risk
Profit
0.167
Normalized weights
Market share
0.556
Risk
0.278
Figure 13.4 – The across-criteria weights for the furniture company problem
each of the other benefit scales. The resulting weights are known as the
across-criteria weights.
To derive the weights (which are shown in Figure 13.4) the facilitator
looked for a region where a benefit had a within-criterion weight of 100,
since this would show where there was the largest swing from the best
to the worst position for that benefit. In fact, in this case all three benefits
have their biggest swing in the East region (see Figure 13.3). He therefore
asked the group to consider this region and asked them to imagine a
strategy which offered the worst short-term profit (−$30 million), the
poorest prospect for expanding market share and the highest (i.e. least
desirable) level of risk. The managers were then asked: if they could
change just one of these benefits to its best possible value, which would
they choose? The group were unanimous that they would be most
concerned to move to the best possible value for market share. This
benefit was therefore given an across-criteria weight of 100.
The group’s second choice was to move to the best possible position
for risk. In fact, a move from the most risky to the least risky position
was regarded as only 50% as important as the swing from the worst to
the best market share position. ‘Risk’ was therefore allocated a weight
of 50. A move from the lowest to the highest short-term profit (i.e. a
move from −$30 million to $3 million) was the least preferred out of the
possible swings and, after some discussion, this benefit was assigned a
weight of 30. The three across-criteria weights were then normalized (see
Chapter 3) and these normalized weights are also shown in Figure 13.4.
Identifying the costs and benefits of the packages
It was now possible to identify the overall benefits and costs of any of
the packages. At this point the group were asked to propose a package