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Unformatted text preview: 19 Solutions 3.1. Fundamental objectives are the essential reasons we care about a decision, whereas means objectives are things we care about because they help us achieve the fundamental objectives. In the automotive safety example, maximizing seat-belt use is a means objective because it helps to achieve the fundamental objectives of minimizing lives lost and injuries. We try to measure achievement of fundamental objectives because we want to know how a consequence “stacks up” in terms of the things we care about. Separating means objectives from fundamental objectives is important in Chapter 3 if only to be sure that we are clear on the fundamental objectives, so that we know what to measure. In Chapter 6 we will see that the means-objectives network is fertile ground for creating new alternatives. 3.2. Answers will vary because different individuals have different objectives. Here is one possibility. (Means objectives are indicated by italics .) 3.3. A constructed scale for “ambiance” might be the following: Best Many large windows. Unit is like new. Entrance and landscape are clean and inviting with many plants and open areas. -- Unit has excellent light into living areas, but bedrooms are poorly lit. Unit is clean and maintained, but there is some evidence of wear. Entrance and landscaping includes some plants and usable open areas but is not luxurious. -- Unit has one large window that admits sufficient light to living room. Unit is reasonably clean; a few defects in walls, woodwork, floors. Entrance is not inviting but does appear safe. Landscaping is adequate with a few plants. Minimal open areas. -- Unit has at least one window per room, but the windows are small. Considerable wear. Entrance is dark. Landscaping is poor; few plants, and small open areas are not inviting. Worst Unit has few windows, is not especially clean. Carpet has stains, woodwork and walls are marred. Entrance is dark and dreary, appears unsafe. Landscaping is poor or nonexistent; no plants, no usable open areas. 3.4. It is reasonable in this situation to assume that the bank’s objective is to maximize its profit on the loan, although there could be other objectives such as serving a particular clientele or gaining market share. The main risk is whether the borrower will default on the loan, and the credit report serves as imperfect information. Assuming that profit is the only objective, a simple influence diagram would be: Best Apartment Minimize Travel time Maximize Use of leisure time Maximize Ambiance Minimize Rent Alone FriendsNeighbors To School To Shopping To Leisure-time Activities Centrally located Maximize windows, light Maximize features (e.g., pool, sauna, laundry) Parking at apartment Maximize Discretionary $$ Best Apartment Minimize Travel time Maximize Use of leisure time Maximize Ambiance Minimize Rent Alone FriendsNeighbors To School To Shopping To Leisure-time Activities Centrally located Maximize windows, light Maximize features (e.g., pool, sauna, laundry) Parking at apartment Maximize Discretionary $$ 20...
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This note was uploaded on 12/04/2011 for the course BUSINESS 500 taught by Professor John during the Spring '11 term at Kansas.
- Spring '11