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Chapter+9+-+Multicriteria+Decision+Making

# Chapter+9+-+Multicriteria+Decision+Making - Chapter 9...

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Chapter 9 Multicriteria Decision Making

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Reading Questions 1. What are goal programming, analytical hierarchy process, and scoring models? 2. What are goals, positive deviational variables and negative deviational variables in goal programming? 3. What are some characteristics of objective functions, constraints, and deviational variables in goal programming? 4. What is true of goal programming solutions? 5. Who introduced the concept of goal programming? 6. Be able to describe the hierarchy for AHP. 7. What are pairwise comparisons, preference scales, pairwise comparison matrices, and synthesization in AHP? 8. Be able to describe the mathematical steps used to arrive at the AHP-recommended decision. 9. What is the consistency index and how is it calculated? 10. Be able to list and discuss the three components of the scoring model used in your book.
Chapter Topics Goal Programming Graphical Interpretation of Goal Programming Computer Solution of Goal Programming Problems with Excel The Analytical Hierarchy Process Scoring Models

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Multicriteria Decision Making The consideration of multiple criteria in making a decision instead of just a single objective. We will discuss three techniques that can be used to solve problems with multiple objectives: goal programming, analytical hierarchy process, and scoring models. Goal programming is a variation of linear programming in that it considers more than one objective (called goals) in the objective function. AHP and scoring models are based on a comparison of decision alternatives for different criteria that reflects the decision maker’s preferences. The result is a mathematical “score” for each alternative that helps the decision maker rank the alternatives.
Beaver Creek Pottery Example ` Resource Requirements Product Labor (Hr./Unit) Clay (Lb./Unit) Profit (\$/Unit) Bowl 1 4 40 Mug 2 3 50 Objective: Given the labor and material constraints, the company wishes to know how many bowls and mugs to produce each day in order to maximize profit. Resource 40 hrs of labor per day Availability: 120 lbs of clay

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The LP Model produced mugs of number produced bowls of number where 0 , clay of lb. 120 3 4 labor of hr. 40 2 subject to 50 40 \$ maximize 2 1 2 1 2 1 2 1 2 1 = = + + + = x x x x x x x x x x Z
Goal Programming Suppose that instead of having one objective, the pottery company has several objectives, listed in order of importance: 1. To avoid layoffs, the company does not want to use fewer than 40 hours of labor per day. 2. The company would like to achieve a satisfactory profit level of \$1,600 per day. 3. Because the clay must be stored in a special place so that it does not dry out, the company prefers not to keep more than 120 pounds on hand each day. 4.

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Chapter+9+-+Multicriteria+Decision+Making - Chapter 9...

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