By Murty K.
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Additional resources for Optimization models for decision making
Measuring one in cost $/year, and another in cost $/lifetime would be wrong. 3. Put all ratings in the same direction and same range: The 26 Ch. 2. Scoring Method points mentioned in 1 and 2 above apply to characteristics evaluated as ratings too. When characteristics are evaluated by ratings, the range of ratings used for evaluating all the characteristics should be the same. That is, if the range used for rating one is 0 to 100, it should be the same for all the characteristics. If characteristic 1 is evaluated as a rating between 0−100 with “the larger the better mode” (so characteristic 1 is a profit), and characteristic 2 is evaluated as a rating between 0−10 with “the smaller the better mode” (so characteristic 2 is a cost), it is necessary to convert them into the same direction as all the other characteristics and equalize their range by scaling appropriately.
Since trade-oﬀ information among the various objective functions is not given, multi-objective optimization problems are not precisely stated mathematical problems. Techniques for handling them usually involve trial and error using several degrees of compromises among the various objective functions until a consensus is reached that the present solution looks reasonable from the point of view of all the objective functions. We restrict the scope of this book to single objective optimization models.
A profit measure. To transform this into a cost measure in terms of “annual cost expressed in $”, we need an estimate of how many miles the customer expects to drive in this car that year, and what the average price of gas will be during the year. Here again human judgement and rational thinking have to be used to come up with reasonable estimates. Suppose the customer expects to drive about 10,000 miles in this car and the average price of gas is expected to be $2/gallon that year. 2 Transformations 25 2 × 10,000/(MPG).