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Multiattribute Preference Analysis with Performance Targets

General Motors, Pontiac Centerpoint North Campus, MC 483-585-372, 585 South Boulevard, Pontiac, Michigan 48341
Department of Supply Chain Management, W. P. Carey School of Business, Arizona State University, Tempe, Arizona 85287-4706
robert.bordley{at}gm.com
craig.kirkwood{at}asu.edu

This paper develops an approach based on performance targets to assess a preference function for a multiobjective decision under uncertainty. This approach yields preference functions that are strategically equivalent to conventional multiattribute utility functions, but the target-oriented approach is more natural for some classes of decisions. In some situations, the target-oriented preference conditions are analogous to reliability theory conditions for series or parallel failure modes in a system. In such cases, reinterpreting the conditions using reliability concepts can be useful in assessing the preference function. The target-oriented approach is also a generalization of common forms of goal programming. The approach has particular applicability for resource allocation decisions where the outcome of the decision is significantly determined by the actions of other stakeholders to the decision, such as new product development or decision making in a controversial regulated environment.

Subject classifications: decision analysis; utility function assessment; utility/preference; multiattribute; target-oriented preferences; mathematical programming; goal programming.
History: Received July 2000; revision received April 2001; revision received January 2002; revision received May 2002; revision received November 2002; revision received February 2003; accepted March 2003.

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