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An office location problem 29
we may use the attribute ‘number of people surveyed who recall seeing
the advertisement’ in order to measure the degree to which the objective
was achieved. Sometimes we may have to use an attribute which is
not directly related to the objective. Such an attribute is referred to as
a proxy attribute. For example, a company may use the proxy attribute
‘staff turnover’ to measure how well they are achieving their objective
of maximizing job satisfaction for their staff.
Value and utility
For each course of action facing the decision maker we will be deriving
a numerical score to measure its attractiveness to him. If the decision
involves no element of risk and uncertainty we will refer to this score
as the value of the course of action. Alternatively, where the decision
involves risk and uncertainty, we will refer to this score as the utility of
the course of action. Utility will be introduced in Chapter 5.
An office location problem
The following problem will be used to illustrate the analysis of decisions
involving multiple objectives. A small printing and photocopying
business must move from its existing office because the site has been
acquired for redevelopment. The owner of the business is considering
seven possible new offices, all of which would be rented. Details of the
location of these offices and the annual rent payable are given below.
Location of office Annual rent ($)
Addison Square (A) 30 000
Bilton Village (B) 15 000
Carlisle Walk (C) 5 000
Denver Street (D) 12 000
Elton Street (E) 30 000
Filton Village (F) 15 000
Gorton Square (G) 10 000
While the owner would like to keep his costs as low as possible, he would
also like to take other factors into account. For example, the Addison
Square office is in a prestigious location close to potential customers, but
it is expensive to rent. It is also an old, dark building which will not be