Objectives and Attributes Jason R. W. Merrick Based on Keeney, R. L. - PowerPoint PPT Presentation

Objectives and Attributes Jason R. W. Merrick Based on Keeney, R. L. 1992. Value-Focused Thinking . Harvard University Press, Cambridge, MA.

Excerpt from “Common Mistakes in Making Value Trade-offs” by Ralph Keeney, Operation Research, Vol. 5, Nos. 6, pp. 935-945, 2002. � Most important decisions involve multiple objectives, and usually with multiple-objective decisions, you can’t have it all. � You will have to accept less achievement in terms of some objectives in order to achieve more on other objectives. � But how much less would you accept to achieve how much more? � The answers specify a value trade-off and indicate two consequences that are indifferent to each other. � Making the judgments about how much you would give up on one objective to achieve specific amounts on other objectives is the essence of value trade-offs.

What is a value trade-off? “A key reason for many mistakes in making value trade-offs is that the � concept of a value trade-off is frequently misunderstood. Take a very simple example. Suppose you are reasonably hungry and have $30 in your pocket. Your hunger is such that you would be indifferent between eating a hamburger and keeping $20 and not eating the hamburger and having $30. In other words, your value trade-off for the hamburger is $10. This means that you would be willing to pay up to $10 for that hamburger if you had to. However, suppose there is a convenient hamburger if you had to. However, suppose there is a convenient location where you could purchase a hamburger for $4. Now, you are willing to pay only $4 for the hamburger (and not more) and keep $26 in your pocket. Such a decision makes you better off: Having eaten a hamburger and keeping $26 is preferred to having $30 and not eaten a hamburger. Your value trade-off for the hamburger is $10, whereas the trade-off that you are willing to make given the choices available is to pay $4 for a hamburger. For this reason, in lay terminology, we refer to a value trade-off as an “even swap” (Hammond et al. 1999), as you are equally well off after an exchange based on a value trade-off is made. “

Decision Frames � A decision frame consists of a decision maker’s set of alternatives and the objectives that the decision maker is attempting to achieve when choosing. � The objectives can be categorized as means, fundamental and strategic objectives. fundamental and strategic objectives. � A means objective is one way to achieve another objective. � A fundamental objective is an objective that governs a decision maker’s choice in a particular decision context. � A strategic objective is one that reflects the long-term goals of a decision maker’s organizational setting; a strategic objective may be affected by many decisions in an organization.

Means Objectives Networks � A means objective is one way to achieve another objective. � A means objective network is a graphical tool to connect objectives, depicting the means- ends relationships. � Each objective is written in the network and then the objectives are connected by arrows. � An arrow from objective A to objective B indicates that objective A is a means to achieving objective B.

How far do we follow the diagram? A � I want (objective A) B � Why do I want (objective A)? � Answer � Because then I will get (objective B) � Because then I will get (objective B) � When do we reach fundamental objectives? � When do we reach strategic objectives? � The control of consequences criteria tells us

Value or Objectives Hierarchy � Fundamental objectives are those that we actually wish to achieve in a particular decision context, as opposed to means objectives that are merely a means to attaining our fundamental objectives attaining our fundamental objectives. � The hierarchy of fundamental objectives, or value hierarchy , can then be developed as a tree with the objectives on each branch defining in more detail what is meant by the objective above them. � A value hierarchy ensures that the objectives are appropriately related to the overall objective.

An Example of a Value Hierarchy Maximize quality of Maximize quality of Upham Brook watershed Upham Brook watershed Maximize quality Maximize quality Maximize quality Maximize quality of wildlife habitat of wildlife habitat of human habitat of human habitat .50 .50 .50 .50 Improve Improve Improve Improve Improve Improve improve improve Improve Improve Maximize Maximize Maximize Maximize fish fish invertebrate invertebrate amphibian amphibian mammal mammal bird bird residential residential commercial/ commercial/ habitat habitat habitat habitat habitat habitat habitat habitat habitat habitat value value industrial value industrial value .20 .20 .20 .20 .20 .20 .20 .20 .20 .20 0.7 0.7 0.3 0.3 Improve Improve Improve Improve Improve Improve Restore RZ Restore RZ Restore RZ Restore RZ Make water safe for Make water safe for Make water safe for Make water safe for water quality water quality water quality water quality land use land use & floodplain & floodplain & floodplain & floodplain designated Usage designated Usage designated Usage designated Usage .35 .35 .25 .25 .30 .30 .55 .55 .65 .65 0.35 0.35 0.25 0.25 Restore naturally Restore naturally Restore RZ Restore RZ Restore RZ Restore RZ Improve Improve Improve Improve Increase access Increase access Increase access Increase access stable stream stable stream & floodplain & floodplain & floodplain & floodplain land use land use land use land use & recreation & recreation & recreation & recreation channel channel .20 .20 .25 .25 .25 .25 .23 .23 0.16 0.16 0.11 0.11 .25 .25 Restore naturally Restore naturally Restore naturally Restore naturally Improve Improve Restore RZ Restore RZ Improve Improve Increase flood Increase flood Increase flood Increase flood stable stream ch stable stream ch stable stream stable stream land use land use & floodplain & floodplain water quality water quality safety safety safety safety annel annel channel channel .20 .20 .20 .20 .10 .10 0.32 0.32 0.43 0.43 .05 .05 .05 .05 Restore naturally Restore naturally Restore natural Restore natural Improve Improve Restore natural Restore natural Improve Improve Improve Improve Improve Improve stable stream stable stream stream flow stream flow land use land use stream flow stream flow water quality water quality aesthetics aesthetics aesthetics aesthetics channel channel .15 .15 .15 .15 .05 .05 .05 .05 0.17 0.17 0.21 0.21 .25 .25 Restore naturally Restore naturally Restore natural Restore natural Restore natural Restore natural Improve Improve Restore natural Restore natural stable stream stable stream stream flow stream flow stream flow stream flow water quality water quality stream flow stream flow channel channel .15 .15 .10 .10 .10 .10 .02 .02 .10 .10

Another Example of a Value Hierarchy Risk in a Port or Waterway Composition Traffic Weather Waterway Potential Potential of Calling Conditions Conditions Configuration Consequences Impacts Fleet Percentage Volume of Wind Visiblity Nos passengers Economic of High Risk Deep Draft Traffic Conditions Obstructions per year Impacts Deep Draft (number of vessel Vessels Vessels transits per year) transits per year) Percentage Volume of Visibility Passing Volume of Environmental of High Risk Tug Traffic Conditions Arrangements Petroleum Impacts Shallow Draft (number of vessel Cargoes Vessels transits per year) Volume of Current, Tides Channel Volume of Pleasure and and River Conditions and Bottom Other Fishing Traffic Hazardous (Shallow Draft) Cargoes Traffic Ice Waterway Density Conditions Complexity (Average nos of ships per mile)