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Decision making with multiattribute performance targets: The impact of changes in performance and target distributions

Publication ,  Journal Article
Tsetlin, I; Winkler, RL
Published in: Operations Research
March 1, 2007

In many situations, performance on several attributes is important. Moreover, a decision maker's utility may depend not on the absolute level of performance on each attribute, but rather on whether that level of performance meets a target, in which case the decision maker is said to be target oriented. For example, typical attributes in new product development include cost, quality, and features, and the corresponding targets might be the best performance on these attributes by competing products. Targets and performance levels typically are uncertain and often are dependent. We develop a model that allows for uncertain dependent targets and uncertain dependent performance levels, and we study implications for decision making in this general multiattribute target-oriented setting. We consider the impact on expected utility of modifying key characteristics of performance (or target) distributions: location, spread, and degree of dependence. In particular, we show that explicit consideration of dependence is important, and we establish when increasing or decreasing dependence is beneficial. We illustrate the results numerically with a normal model and discuss some extensions and implications. © 2007 INFORMS.

Duke Scholars

Published In

Operations Research

DOI

EISSN

1526-5463

ISSN

0030-364X

Publication Date

March 1, 2007

Volume

55

Issue

2

Start / End Page

226 / 233

Related Subject Headings

  • Operations Research
  • 3507 Strategy, management and organisational behaviour
  • 1503 Business and Management
  • 0802 Computation Theory and Mathematics
  • 0102 Applied Mathematics
 

Citation

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Tsetlin, I., & Winkler, R. L. (2007). Decision making with multiattribute performance targets: The impact of changes in performance and target distributions. Operations Research, 55(2), 226–233. https://doi.org/10.1287/opre.1060.0343
Tsetlin, I., and R. L. Winkler. “Decision making with multiattribute performance targets: The impact of changes in performance and target distributions.” Operations Research 55, no. 2 (March 1, 2007): 226–33. https://doi.org/10.1287/opre.1060.0343.
Tsetlin, I., and R. L. Winkler. “Decision making with multiattribute performance targets: The impact of changes in performance and target distributions.” Operations Research, vol. 55, no. 2, Mar. 2007, pp. 226–33. Scopus, doi:10.1287/opre.1060.0343.

Published In

Operations Research

DOI

EISSN

1526-5463

ISSN

0030-364X

Publication Date

March 1, 2007

Volume

55

Issue

2

Start / End Page

226 / 233

Related Subject Headings

  • Operations Research
  • 3507 Strategy, management and organisational behaviour
  • 1503 Business and Management
  • 0802 Computation Theory and Mathematics
  • 0102 Applied Mathematics