MOD1_264-267

# MOD1_264-267 - 72106 MOD01 GGS 2:35 PM Page 264 M O D U L E...

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264 T EACHING S UGGESTIONS Teaching Suggestion M1.1: Using Multifactor Decision-Making Techniques. Many decisions students make involve a number of factors. Thus, multifactor decision-making techniques can be useful and practi- cal. This section can be started by having students give examples of decisions that require the analysis of multiple factors. Buying a car or stereo and picking the best job offer are examples. Once stu- dents understand the principles of multiplying factor weights times factor evaluations, they will be able to understand the use of AHP. Teaching Suggestion M1.2: Using AHP. Have the students describe situations where AHP would be pre- ferred over the multifactor evaluation process. You may want to take one of these situations and show how pairwise comparisons can be made. Students can then be asked to complete the AHP problem and determine the best solution. This can lead to in-class discussions on the AHP process. S OLUTIONS TO Q UESTIONS AND P ROBLEMS M1-1. Multifactor decision making is appropriate when a deci- sion involves a number of factors. Deciding to buy a house, for ex- ample, can involve the price, location, taxes, utilities, and so forth. M1-2. When using multifactor decision making, each factor re- ceives an importance weight. These weights will sum to 1. Then every alternative and factor combination will receive a factor eval- uation. The factor weights are multiplied by the factor evaluations to get a weighted evaluation for each alternative. The alternative with the highest weighted evaluation is selected. M1-3. The analytic hierarchy process should be used when it is difFcult or impossible to determine factor weights and factor eval- uations subjectively. In this case, pairwise comparisons are per- formed to assist in the decision-making process and determine the best alternative.

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MOD1_264-267 - 72106 MOD01 GGS 2:35 PM Page 264 M O D U L E...

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