Use a checklist and a scoring model to select the best car for a married graduate student with one child. State your assumptions clearly.
An existing two-lane highway between two cities is to be converted to a four-lane divided
freeway. The distance between them is 10 miles. The average daily traffic on the new freeway
is forecast to average 20,000 vehicles per day over the next 20 years. Trucks represent
5% of the total traffic. Annual maintenance on the existing highway is $1500 per lane-mile.
The existing accident rate is 4.58 per million vehicle miles (MVM). Three alternative plans of improvement are now under consideration.
Plan A: Add two lanes adjacent to the existing lanes at a cost of $450,000 per mile. It is estimated that this plan would reduce auto travel time by 2 minutes and truck travel time by 1
minute when compared with the existing highway. The estimated accident rate is 2.50 per
MVM, and the annual maintenance is expected to be $1,250 per lane-mile for all four lanes
Plan B: Improve along the existing alignment with grade improvements at a cost of
$650,000 per mile, and add two lanes. It is estimated that this would reduce auto and truck
travel time by 3 minutes each compared with current travel times. The accident rate on the
improved road is estimated to be 2.40 per MVM, and annual maintenance is expected to
be $1,000 per lane-mile for all four lanes.
Plan C: Construct a new four-lane freeway on new alignment at a cost of $800,000 per mile. It is estimated that this plan would reduce auto travel time by 5 minutes and truck travel time by 4 minutes compared with current conditions. The new freeway would be 0.3 miles longer than the improved counterparts discussed in plans A and B. the estimated accident rate for plan C is 2.30 per MVM, and annual maintenance is expected to be $1,030 per lane-mile for all four lanes. If plan C is adopted, then the existing highway will be abandoned with no salvage value.
Useful data:
Incremental operating cost
- Autos 6 cents/mile
- Trucks 18 cents/mile
Time saving
-Autos 3 cents/minute
- Trucks 15 cents/minute
Average accident cost $1.200
If a 5% interest rate is used, then which of the three proposed plans should be adopted?
Base your answer on the individual B/C ratios of each alternative. When calculating these
values, consider any annual incremental operating costs due to distance, a user disbenefit
rather than a cost.

In Exercise 5.14, suppose that the owner wishes to consider her decision problem over a 2-
day period. Her alternatives for the second day are determined as follows. If the demand
in day 1 is equal to the amount stocked, then she will continue to order the same quantity
on the second day. Otherwise, if the demand exceeds the amount stocked, then she will
have the options to order higher levels of stock on the second day. Finally, if day 1's demand is less than the amount stocked, then she will have the options to order any of the lower levels of stock for the second day. Express the problem as a decision tree, and find the optimal solution using the cost data given in Exercise 5.14.
6.1 Assume that you work for a company that designs and fabricates VLSI chips.You have
been given the job of selecting a new computer-aided design software package for the engineering group.
a. Develop a MAUT model to assist in the selection process.
b. Develop an AHP model to assist in the selection process.
In both cases, begin by enumerating the major criteria and the associated subcriteria. Explain
your assumptions. Who are the possible decision makers? How do you think the outcome of the analysis would change with each of these decision makers?

6.6 Use the criteria below to construct a two-level objective hierarchy (major criteria with one -
set of subcriteria under each) to help evaluate political candidates. Consider as alternatives
the major candidates running in the last U.S. presidential election, and use the AHP
to make your choice.
Criteria for choosing a national political candidate:

• Charisma: Personal leadership qualities inspiring enthusiasm and support
• Glamor: Charm, allure, personal attractiveness; associations with other attractive people
• Experience: Past office holding relevant to the position sought; preparation for the position
• Economic policy: Coherence and clarity of a national economic policy
• Ability to manage international relations: Coherence and clarity of foreign policy plus

ability to deal with foreign leaders

• Personal integrity: Quality of moral standards, trustworthiness
• Past performance: Quality of role fulfillment-independent of what the role was-in

previous public offices; public record

• Honesty: Lawfulness in public life, law-abidingness

6.7 Louise Ciccone, head of industrial engineering for a medium-sized metalworking shop,
wants to move the CNC machines from their present location to a new area. Three distinct
alternatives are under consideration. After inspecting each alternative and determining
----
TABLE 6.5
Alternative
Attribute Area I Area II Area III Ideal Standard Worst
A 500ft 300ft 75ft 0ft 300ft 1,000ft
B Good Very good Good Excellent Good Poor
C Excellent Very good Good Excellent Good Poor
D $7,500 $3,000 $8,500 $0 $5,000 $10,000
E 60,000ft2 85,000ft2 25,000ft2 10,000ft2 25,000ft2 150,000ft2
which factors reflect significant differences among the three, Louise has decided on five independent attributes to evaluate the candidates. In descending order of importance, they are
A. Distance traveled from one machine to the next (more distance is worse)
B. Stability of foundation [strong (excellent) to weak (poor)]
C. Access to loading and unloading [close (excellent) to far (poor)]
D. Cost of moving the machines
E. Storage capacity
(Note: Once the machines have been moved, operational costs are independent of the area
chosen and hence are the same for each area.) The data associated with these factors for
the three alternatives are in Table 6.5.
Using the multiattribute utility methodology, determine which alternative is best. For
at least one attribute, state all of the probabilistic tradeoff (lottery-type) questions that
must be asked together with answers to obtain at least four utility values between the
"best" and "worst" outcomes so that the preference curve can be plotted. For the other attributes,
you may make shortcut approximations by determining whether each is concave
or convex, upward or downward, and then sketching an appropriate graph for each. Next,
ask questions to determine the scaling constants k.; and compute the scores for the three
alternatives. [Note: If you follow the recommended procedure for deriving the scaling constants,
probably ∑¦iki ≠ 1, then so you should use the multiplicative model Equation
(6.1a). After comparing alternatives by that model, "normalize" the scaling constants so
∑¦iki = 1, and then compare the alternatives using the additive model Eq. (6.1b). (It is not
theoretically correct to normalize the ki values to enable use of the additive model.) How
much difference does use of the "correct" model make?]