Logical Decisions - Classweb

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Storing your preference information LDW stores your preference information in what are called preference sets. When you start LDW it creates the first preference set for you. You can define many preference sets for a single decision (perhaps for different people). You can add more preference sets with the Edit::Add or View::Select/Change Preference Sets option. Converting the Measures to Common Units LDW converts an alternative's measure levels to common units called utility before it combines them. Each measure's most preferred level is assigned a utility of one (1.0) while its least preferred level is assigned a utility of zero (0.0). Intermediate levels are assigned with what is called a utility function, or more specifically a SUF (for Single-measure Utility Function). The easiest conversion is a straight line, where each unit change in a measure level results in an equal change in utility. This is the most common case, and the default. (Defaults are the initial settings used by LDW in various situations). So, if you want a straight line conversion from a measure's original units to utility you don't have to do anything. Non-linear conversions Sometimes a straight line SUFs isn’t right. Suppose you are hiring employees and "years of experience" is one of your measures. You might feel that after a certain point additional years of experience aren't that helpful. In this case you might think that the first few years of experience add more utility than the last few. You can use a curved (“nonlinear”) SUF to capture this idea. In the example above, suppose two years experience is the least preferred level and 30 years is the most preferred level, but that you really want someone with around 5-10 years of experience. In terms of desirability, you might end up defining the preference mid-point of the 2-30 year range as five years. Figure 3-1 shows the resulting curve for years of experience. 3-4 Section 3 -- Quick Start
Figure 3-1. The SUF for "Years of Experience" converts years to utility. Two years is the least preferred level, 30 is most preferred. 5 years is the mid-point in terms of preference. LDW provides two interactive methods for identifying midpreference levels. These are described in the In-Depth section, (page 9-13). LDW also provides several alternate methods for converting levels to common units. These include direct assessment and the Analytic Hierarchy Process. Combining the measures utilities into an overall score As with measures, the desirability of each alternative on a goal is described by a number called utility. LDW computes an alternative’s utility for a goal by combining its utility for each of the goal’s members (measures or sub-goals) using a weighted average. The influence of an alternative’s level on a measure on the alternative’s utility on the goal the measure belongs to is determined by the measure’s weight. LDW uses the structure of the goals hierarchy to aggregate measure utilities into utilities for the lower level goals and then Section 3 -- Quick Start 3-5
Page 1 and 2: Logical Decisions Decision Support
Page 3 and 4: Table of Contents Table of Contents
Page 5 and 6: Assessing Weights with Weight Ratio
Page 7: Assessing Interactions Between Meas
Page 11 and 12: Introduction Real decisions aren't
Page 13: S E C T I O N Requirements and Inst
Page 16 and 17: "Logical Decisions". This program g
Page 19 and 20: Quick Start Introduction This secti
Page 21: Defining goals and measures. In LDW
Page 25 and 26: weights of the measures. All of the
Page 27: S E C T I O N Basic Tutorial 4
Page 30 and 31: Figure 4-1. Tutorial overview. 4-2
Page 32 and 33: Now lets make sure the alternatives
Page 34 and 35: Assume you have decided that you wi
Page 36 and 37: Next we will enter the measures for
Page 38 and 39: Defining Preferences The alternativ
Page 40 and 41: 1. Select the Assess::Common Units
Page 42 and 43: almost equally unacceptable, while
Page 44 and 45: 1. Select the Assess::Common Units
Page 46 and 47: When you do this, the tradeoff grap
Page 48 and 49: 1. Select "Performance" and "Price"
Page 50 and 51: 8. Click on the "Equal" button to t
Page 52 and 53: Figure 4-11. Display generated by R
Page 54 and 55: Figure 4-13. Overall ranking for tr
Page 56 and 57: Figure 4-15. Graph showing sensitiv
Page 58 and 59: You can see the completed introduct
Page 61 and 62: Advanced Tutorial This tutorial sec
Page 63 and 64: Probabilities There is a problem wi
Page 65 and 66: This information indicates that the
Page 67 and 68: A uniform distribution is defined b
Page 69 and 70: On the left is a list of the possib
Page 71 and 72: Figure 5-2. Example of Results::Unc
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screen a large database for the alt
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9. LDW will ask if you want to appe
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commit to buying their truck before
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see that the rankings for all the a
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S E C T I O N Using LDW 1: Structur
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The Edit::Insert option. The Insert
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! Summary -- view a dialog box that
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structure like an organization char
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If you check the Show Assessment St
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saves it for later pasting. When yo
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You can create a new Matrix view by
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The quick entry view shows the alte
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Structuring Goals The goals in an L
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these two fields to describe each m
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the hierarchy. In the Matrix view,
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! Point Estimate -- use a single nu
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Figure 6-12. Example of a measure l
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Figure 6-14. Example of a measure l
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pass, LDW replaces each probabilist
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Figure 6-17. Dialog box for definin
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Figure 6-18. Measure Category Dialo
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S E C T I O N Using LDW 2: Assessin
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measure utility functions for the g
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information as possible when you ch
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measures with categories require mu
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The "Reset" button deletes any asse
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You can change the shape of the cur
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Figure 7-4. Utility Assessment Scre
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very different from the average of
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Figure 7-6. Assessment matrix for A
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You can, however, leave the assessm
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properties dialog box can be select
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the same level. LDW provides a grap
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options in the Hierarchy menu to ad
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The check box labeled "Allow Repres
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Next you will see a tradeoff assess
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The Tradeoff::Use Alternatives to S
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Figure 7-13. Example of Direct Entr
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You can think of the importance num
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Figure 7-15. Assessment Screen for
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When you have selected two members
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("importance strength") that best d
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clicking on the "Initialize" button
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Set a Small k. The Enter Small k op
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select the tradeoff you would like
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Figure 7-18. Effects of consistency
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Using LDW 3: Reviewing Results Intr
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The curve shows how the utility fun
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The tradeoff graph has one measure
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When you select the option, you are
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the relative weights of the "Price"
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epresents a computer alternative wi
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Figure 8-11. Example of Review::Ass
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e true even if the measure has a ve
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an analysis are included in exactly
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Graph Weights The Graph Weights dis
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Figure 8-16. Results::Rank Alternat
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Figure 8-18. Dialog box for Results
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You can use the measure equivalents
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simulation for each alternative usi
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Sensitivity Graphs Sensitivity grap
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You can view a sensitivity table by
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Figure 8-28. Example of Results::Sc
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Figure 8-30. Example of Results::Sc
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In the dialog box, you are asked to
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Figure 8-34. Dialog box for Results
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Graph an Alternative The graph an a
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Figure 8-38. Example of Results::Gr
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Finally, the two radio buttons on t
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Figure 8-43. Example of Results::Co
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Printing and Saving Windows You can
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The dialog box will show you the fi
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Figure 8-45. Dialog box for Edit::C
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Changing the range for utility. You
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Figure 8-50. Dialog box for Prefere
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the current color for that type of
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copies the selected objects to the
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analysis with the skeleton analysis
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Figure 8-55. Dialog box for File::I
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the other measures. The measure nam
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The idea of the Import Structure op
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Next, LDW asks you if it should app
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Other Options utility function for
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In addition, the Window menu contai
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In Depth Introduction This section
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A third example is a portfolio deci
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Each alternative has a raw score (c
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into more specific goals continues
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Measures in LDW You define measures
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computed measure levels to common u
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Converting the Measures to Common U
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Figure 9-2. Example of linear (stra
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For an example of the mid-level spl
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Since U(L0) = U(80) = 0 and U(L1) =
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Figure 9-5. Summary of SUF assessme
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describe two alternatives: A, which
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with equal chances of 40 and 70 per
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In the original formulation of the
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1 Equal Importance Two activities c
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You begin the process by selecting
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Figure 9-7. Effects of goals with a
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0.5. Then the weight assigned to "P
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! You can use the "Smarter Method"
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allocates this weight before comput
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nth root of the product of the rati
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Figure 9-8. Summary of estimating t
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on the decision maker's response, L
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Figure 9-10. MUF assessment figure
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Now think of adjusting P so that th
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Another approach is to use the rang
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Figure 9-12. Quantitative range vs.
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If a measure’s range changes, LDW
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Figure 9-14 is an example of the ov
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Similarly, a single member can have
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chance having 160 hp (the most pref
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A probability of less than 0.5 for
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Interpreting the Ranking Results LD
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S E C T I O N Examples 10
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the idea that other manufactures an
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The completed goals hierarchy is sh
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Buying a House The ranking results
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Figure 10-5. Goals hierarchy for bu
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Overall goal Quality goal Costs goa
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The preference assessments were don
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Figure 10-9. Goals hierarchy for re
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! Noise, ! Agricultural Impacts, an
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S E C T I O N Commands Summary 11
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Assess Menu Edit Menu The Assess me
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File Menu Edit::Insert Lets you add
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utility function” if the active g
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Matrix Menu ! Hierarchy -- options
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Results::Dynamic Sensitivity See th
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Review::Compute Utilities Compute t
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Tradeoff Menu View Menu LDW display
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S E C T I O N Glossary 12
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Common Units Certainty Equivalent C
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LDW File Level Lottery Measure assi
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MUF MUF Formula See also: Alternati
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Preference Set Probabilistic Level
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Tradeoff Trial program decides whic
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Bibliography B
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The classic reference on multiple m
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Appendix This appendix describes th
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= .125 Thus the weight for cost is
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Index adjusted AHP ................
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computing ................8 - 3 int
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