Exercises on Tradeoffs and Conflicting Objectives

Group Case Submission

Submitted by: FAS C

Jayasree Chakraborty (19F325)
Joel Samuel(19F326)
Krishna Chaitanya Tenneti(19F327)
Lokesh B(19F328)
Mathew Paul(19F329)
Najia Tasleem Syed(19F332)
Question 1

Abbreviations:
Consumer Marketing: CM,
Investment Banking: IB,
Management Consulting: MC,
Manufacturing: Man,
work hours: WH, and $1000=1K

Part A
(a) CM gives low growth by working for 40 WH for a salary of 72K.
IB gives medium growth by working for 60 WH for a salary of 90K.
Thus, Investment Banking is more preferred as it ranks better in 2 criterias.

IB gives medium growth by working for 60 WH for a salary of 90K.

MC gives medium growth by working for 65 WH for a salary of 70K.
Thus, Investment Banking is more preferred as it ranks better in 2 criterias.

IB gives medium growth by working for 60 WH for a salary of 90K.

Man gives high growth by working for 50 WH for a salary of 60K.
Thus, Manufacturing is more preferred as it ranks better in 2 criterias.

(b) This is not a good procedure as we do not know the priority order within these 3 criterias mentioned
by Tom.

Part B
(i)
Job Growth WH Salary(K) Avg Rank

CM Low(1) 40(4) 72(3) 2.66

IB Med(2.5) 60(2) 90(4) 2.83

MC Med(2.5) 65(1) 70(2) 1.83

Man High(4) 50(3) 60(1) 2.66

(ii) Investment Banking is ranked the highest AVG rank.

(c) Investment Banking is chosen as a preferred job in this procedure.

(d) Strength: It follows a fixed procedure of ranking the jobs in order of their perks
Weakness: Preference weightage of each criteria is not known.

Part C

(e) Since, each attribute is weighted equally,

CM= 140
IB= 170
MC= 83
Man= 160

Hence, Investment Banking gets chosen.

(f) This is still not a reasonable procedure as all the criteria have been given the same weightage.
Adv: The jobs criteria are ranked by a specific factor rather than just intuition.
Disadv: no weightage given to prioritize the criteria.

Part D

(g) Given, WG+WW+WS=1

(i) If WG=.2, WW=.5, WS=.3
CM=0*.2+100*.5+55*.3 = 66.5
IB= 62
MC= 22
Man= 60
(ii) If WG=.2, WW=.3, WS=.5
CM= 57.5
IB= 72
MC= 32
Man= 44
(iii) If WG=.5, WW=.3, WS=.2
CM= 41
IB= 52.5
MC= 27.5
Man= 74

Management Consultant doesn’t get the preference in any arrangement.

(h) As in case (g)(i) Consumer Marketing is the job chosen

(i) Salary for Manufacturing firm is negotiable

(i) 70K
Man= 100*.2 + 80*.5 + 50*.3= 75
(ii) 80K
Man= 82.5

(iii) 90K
Man= 90
Thus, for any salary >=70K, Manufacturing firm becomes a desirable job to Tom.

Part E
(j)

This shows that he prefers to work less hours, irrespective of the growth or salary provided by the job.

(k)

Even though the job requiring 60 WH of dedication provided better salary and high growth, he still
preferred the one with 40 WH which shows his preference towards less WH is much greater.

(l)
This shows that if a job pays a high salary and has growth opportunity for 60 WH, he can also take up the
other job for lesser WH indifferently. So only if the 2 other criteria are at their best, he can be indifferent
towards WH.

(m) His weightage given to growth and salary is much less as compared to WH. Only tradeoff can be
done if the other criteria are at their best that he can let go off the WH criteria and be indifferent.

Question 2

Package Price Reliability Flexibility

A $24,000 Above Average Superior

B $22,750 Superior Poor

C $22,500 Adequate Superior

D $19,000 Adequate Poor

Part A

Which Package is best?

As per the question the weights assigned to each Attributes are

W1 for Price = 0.45

W2 for Reliability = 0.20

W3 for Flexibility = 0.35

Strengths of preference scores can be taken from below table

Package Price Reliability Flexibility

A 0 75 100

B 25 100 0
 C 30 0 100

D 100 0 0

Weighted averages for Each package:

A: 0 + (75 *0.20) + (100*0.35) = 50

B: (25*0.45) + (100*0.20) + 0 = 31.25

C: (30*0.45) + 0 + (100*0.35) = 48.5

D: (100*0.45) + 0 + 0 = 45

From Weighted Average Scores we can infer Package A is the best

Part B

How much Paula should pay to increase reliability to “adequate” to “above average”?

Let’s Consider Packages A and C

As they both have the same Flexibility attribute. So, we can eliminate Flexibility attribute from both

Package Price Reliability Flexibility

A $24,000 Above Average Superior

C $22,500 Adequate Superior

Flexibility being same, to improve reliability from Adequate to Above Average Paula have to pay

$24000- $22,500 = $1500

Increase reliability from Above Average to Superior:

First, Let’s Consider packages C and D. Here Both C and D have the same reliability. So, we can eliminate
the Reliability attribute from both.

Package Price Reliability Flexibility

C $22,500 Adequate Superior

 D $19000 Adequate Poor

Reliability being same, to improve Flexibility to Poor to Superior Paula have to pay

$22,500 - $19000 = $3500

Now let’s consider packages A and B to increase reliability from Above Average to Superior

Package Price Reliability Flexibility

A $24000 Above Average Superior

B $22750 Superior Poor

So to increase reliability from Above Average to Superior it also need equating them in terms of
flexibility attribute.

As we know from above that it costs $3500 to improve flexibility from poor to Superior all other
attributes being the same. Let’s add $3500 to B to make it flexibility superior

Package Price Reliability Flexibility

A $24000 Above Average Superior

B $26250 Superior Superior

Now to increase reliability from Above Average to Superior Paula has to pay

$26250 - $24000 = $2250

Part C

How much Paula has to pay to increase flexibility from Poor to Superior?

First, Let’s Consider packages C and D. Here Both C and D have the same reliability. So, we can eliminate
the Reliability attribute from both.

Package Price Reliability Flexibility

C $22,500 Adequate Superior

D $19000 Adequate Poor

Reliability being same, to improve Flexibility to Poor to Superior Paula have to pay

$22,500 - $19000 = $3500

Part D

Paula has eliminated Package D in early deliberations

Package Price Reliability Flexibility

A $24,000 Above Average Superior

B $22,750 Superior Poor

C $22,500 Adequate Superior

Now Lowest Price = $22500 It will be “0”

Maximum Price = $24000 I will be “100”

Strengths of preference scores

Package Price Reliability Flexibility

A 0 75 100

B 84 100 0

C 100 0 100

Weighted Average:

A: 0 + (75 *0.20) + (100*0.35) = 50

B: (84*0.45) + (100*0.20) + 0 = 57.8

C: (100*0.45) + 0 + (100*0.35) = 80

Package C is the best as per new preference scores

Question 3:

Part A

The question presents two options for flyers:

- Quality of food
- Leg room
However, customer preference would vary from customer to customer. The survey question needs to be
re-written. The users are asked – which do you value more? (which is a bit vague)

Value more in terms of experience or money?

In order to make a choice a number of questions need to be asked to the customer to understand his
preference and the weightage of each preference.

Part B

Pros Cons
Additive preference is useful when there are a
large number of alternatives.
The calculation time is a bit too long since the
number of alternatives are many
13 attributes were considered & 100 points
among them basis importance

The comparison is fair since none of the There could be differences in the value of
attributes were neglected money at different locations

Helen seems to have neglected uncertainty in

her analysis