Page 11 -

CONTENTS ix

Summary 522 14 Multicriteria Decisions 593
Worked Example 522
Problems 525 14.1 Goal Programming: Formulation and
Graphical Solution 594
Case Problem 1 Dunes Golf Course 530
Developing the Constraints and the Goal
Case Problem 2 Effortless Events 531
Equations 595
Appendix 12.1 Simulation with Excel 533
Developing an Objective Function with Preemptive
Priorities 597
Graphical Solution Procedure 598
13 Decision Analysis 539
Goal Programming Model 601
13.1 Problem Formulation 541 14.2 Goal Programming: Solving More Complex
Payoff Tables 542 Problems 602
Decision Trees 542 Suncoast Office Supplies Problem 602
13.2 Decision Making without Probabilities 543 Formulating the Goal Equations 603
Optimistic Approach 543 Formulating the Objective Function 604
Conservative Approach 544 Computer Solution 605
Minimax Regret Approach 545 14.3 Scoring Models 609
13.3 Decision Making with Probabilities 546 14.4 Analytic Hierarchy Process 614
Expected Value of Perfect Information 548 Developing the Hierarchy 615
13.4 Risk Analysis and Sensitivity Analysis 551 14.5 Establishing Priorities Using AHP 615
Pairwise Comparisons 616
Risk Analysis 551
Pairwise Comparison Matrix 617
Sensitivity Analysis 552
Synthesization 619
13.5 Decision Analysis with Sample Consistency 620
Information 556 Other Pairwise Comparisons for the Car Selection
Decision Tree 556 Problem 622
Decision Strategy 558 14.6 Using AHP to Develop an Overall Priority
Risk Profile 562 Ranking 623
Expected Value of Sample Information 564
Summary 625
Efficiency of Sample Information 565
Worked Example 625
13.6 Calculating Branch Probabilities 566 Problems 627
13.7 Utility and Decision Making 568 Case Problem EZ Trailers 633
Appendix 14.1 Scoring Models with Excel 634
The Meaning of Utility 569
Developing Utilities for Payoffs 571 Conclusion: Management Science in Practice 635
Expected Utility Approach 573 Appendices 639
Appendix A Areas for the Standard Normal
Summary 575
Distribution 641
Worked Example 575 l
Appendix B Values of e 642
Problems 577
Appendix C Bibliography and References 643
Case Problem 1 Property Purchase Strategy 585 Appendix D Self-Test Solutions 645
Case Problem 2 Lawsuit Defence Strategy 587 Glossary 677
Appendix 13.1 Decision Analysis with Treeplan 587 Index 683

Copyright 2014 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has
deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it.