A Multiobjective Decision Analysis: Budget Planning for Product Engineering

Abstract

A multiobjective decision analysis was conducted to help the director of a product engineering group within a major corporation plan the allocation of his operating budget. Use of decomposition results from multiattribute utility theory led to a nonlinear programming formulation of the allocation problem that was convenient to solve and for which the required utility and probability data could be obtained. The analysis indicated that a substantial change from the traditional allocation policy would be desirable. The analysis approach and the results were well received by management.