Post on 04-Aug-2020
Swing weights and tradeoff(indifference) methods to calculate weights
A company is deciding what strategy to follow with respect to networking its personal
computers.
Evaluation Measure Alternatives
Productivity
improvement Xp
Cost Increase Xc Security Xs
Status Quo 0 0 0
High Quality/High
cost
2 125 0.5
Medium
Quality/Medium
Cost
1 95 0
Low Quality/low
cost
0.5 65 -1
Single dimension value of Xp is from -1 to 2, linear, 2 being the best
Single dimension value of Xc is from 0 to 150, linear, 0 being the best
Single dimension value of Xs is from -2 to 1, 1 being the best. Vs(-1)=0.5, Vs(0)=0.83, and piece
wise linear in between.
Calculate the weights on the measures using swing weights and tradeoff methods.
Swing weights
Tradeoffs (indifference methods)
First calculate the value function
Since it is linear for Xp and Xc use
For increasing function y-low/high-low
For decreasing function high-y/high-low
For Xs use piecewise linear function to find Vs(0.5)
Productivity
improvement
Xp
Cost Increase
Xc
Security Xs
Status Quo 0 0 0
High Quality/High cost 2 125 0.5
Medium
Quality/Medium Cost
1 95 0
Low Quality/low cost 0.5 65 -1
Converting to a scale eof 0-1
Productivity
improvement
Xp
Cost Increase
Xc
Security Xs
Status Quo 0.333333333 1 0.83
High Quality/High cost 1 0.166666667 0.92
Medium
Quality/Medium Cost
0.666666667 0.366666667 0.83
Low Quality/low cost 0.5 0.566666667 0.5
Alternatives Evaluation Measure
Alternatives Evaluation Measure
Next create 2 sets of 2 hypothetical alternatives and make them indifferent. Read below.