Exercises on Tradeoffs and

Conflicting Objectives

HBS Case
 Part-A
Factor No. of factors
Job Growth Work Salary Relative preference
Consumer Mktg (CM) Low 40 hours 72000
Investment Bank (IB) Medium 60 hours 90000 IB>CM (2/3)
Mgmt Consulting (MC) Medium 65 hours 70000 IB dominates MC
Manufacturing (M) High 50 hours 60000 M>IB (2/3)

IB> CM
M>IB
CM>M : Not Transitive
Ignores strength of preference
 Part-B
Factor No. of factors
Job Growth Work Salary Relative preference
Consumer Mktg (CM) 1 4 3 8
Investment Bank (IB) 2.5 2 4 8.5
Mgmt Consulting (MC) 2.5 1 2 5.5
Manufacturing (M) 4 3 1 8.0

Independence of Irrelevant alternatives

MC is clearly a non-contender (dominated by IB)
Ranking changes if it is eliminated from consideration (Tie)
 Part-C
Factor & wts
Job Growth (1/3) Work (1/3) Salary (1/3) Score
Consumer Mktg (CM) 0 100 40 46.67
Investment Bank (IB) 50 20 100 56.67
Mgmt Consulting (MC) 50 0 33 27.67
Manufacturing (M) 100 60 0 53.33

Better than previous ones: satisfies Independence of Irrelevant alternatives

Equal wt assumption is arbitrary
 Part-D
Factor & wts
Job Growth (1/3) Work (1/3) Salary (1/3) Score
Consumer Mktg (CM) 0 100 55 46.67
Investment Bank (IB) 35 50 100 56.67
Mgmt Consulting (MC) 35 0 50 27.67
Manufacturing (M) 100 80 0 53.33

CM: Ww > Wg>Ws

IB: Ws>Wg>Ww
M: Wg>Ws>Ww
Substitute Wts provided: CM
New score for M: 0.2*100+0.5*80+0.3*50=75
>=65000
 Part-E
Factor & wts
Wg Ww Ws
Job Growth Work Hours Annual Salary Score
A 0 0 100 100Ws
B 100 0 0 100Wg

Ws = Wg
 Part-E
Factor & wts
Wg Ww Ws
Job Growth Work Hours Annual Salary Score
C 0 100 0 100Ww
D 100 0 100 100Wg + 100 Ws

Ww> Wg + Ws
 Part-E
Factor & wts
Wg Ww Ws
Job Growth Work Hours Annual Salary Score
E 100 50 100 100 Wg + 50 Ww + 100 Ws
C 0 100 0 100Ww

Ww= 2 (Wg + Ws)

 Part-E
Factor & wts
Job Growth (1/6) Work (2/3) Salary (1/6) Score
Consumer Mktg (CM) 0 100 55 75.8
Investment Bank (IB) 35 50 100 55.8
Mgmt Consulting (MC) 35 0 50 14.2
Manufacturing (M) 100 80 0 70

Solving
Ws=Wg
Ww>Wg+Ws
2(Wg+Ws)=Ww
Wg=1/6
Ww=2/3
Ws=1/6
 Software Package
Attribute & attribute wts
Package Price (0.45) Reliability (0.20) Flexibility (0.35) Score
A 0 75 100 50
B 25 100 0 31.25
C 30 0 100 48.50
D 100 0 0 45.00
Software Package
• (24000-19000 = $5000 increase by (100-0)* 0.45 points)
5000/45= $111……..Price reduction/point
• Adequate Above Average
75*0.2=+15………………..(15*111=$1667)
• Above Average Superior
25*0.2=+5………………..(5*111=$556)
• Poor Superior
100*0.35=+35……………..(35*111=$3889)
Software Package
Factor
Package Price Reliability Flexibility
A 0 75 100
B 83 100 0
C 100 0 100

B 25/30
Software Package
Factor & Factor Wts
Package Price Reliability Flexibility
A 0 75 100
B 83 100 0
C 100 0 100
Weights 0.135 0.20 0.35
Norm wts 0.20 (0.45/0.685) 0.29 (0.2/0.685) 0.51(0.35/0.685)

19000=100 points= 100*0.45 total points…………..D

30*0.45 total points……………C
New Wt=13.5/100
SV Airlines
• No meaning Define Attribute Range
• Direct Assessment of weights avoidable
• Description invariance (X=X1+X2)