Session 9 Flashcards
What are the major network design challenges for next 10 years?
Change of tech to electric in the production side, batteries and electro drivetrains. Feasible to open new plants in Europe and close existing “novelty” sites? This is the question now
What is AHP and what is it used for? What is its general idea?
Analytic Hierarchy Process
Used for Multi-Criteria Decision Making
Develop an hierarchy of decision criteria and define the alternative courses of actions.
What is the basic AHP Algorithm?
1) Determine the relative weights of decision criteria
2) Determine the relative rankings of alternatives
What kind of Comparisons are made with AHP? How does it work?
2 Types:
1) Quantitative Measures to rank
> Example: Government Expenditure / Company Expenditure
2) Pairwise comparison is made with grades 1 to 9
> A rated 9: A is absolutely more important than B
> B rated 1: B is absolutely less important than A
> Higher the grade higher the importance
How is the ranking of Criteria Table read? How important is Business compared to customer? Customer Business Infrastructure Customer 1 1/2 3 Business 2 1 4 Infrastructure 1/3 1/4 1
Row 2 Business compared to customer: Business is 2 = equally or moderately important preferred
Row 1: Then the inverse of this (customer compared to business) will be 1/2
Row 2: Business compared to infrastructure: Business is 4 = Moderately to strongly important preferred
Row 3: Then the inverse of this (İnfrastructure compared to business) will be 1/4
How is Priority Vector calculated in AHP? What does it give? Explain in 4 steps!
1) First transform the ranking of criteria into the matrix A
2) Sum the columns
3) Normalize the matrix = divide each element in a column by the sum of column to get 1 for each sum of column
4) Take the average of every row to get a n*1 matrix X
= The priority vector gives the criteria weights of the criteria in the same order!
Lower the weight, less important the criteria
Higher the weight, more important the criteria
What does the Consistency Ratio show in AHP?
CR shows how consistent the judgements have been relative to large samples of purely random judgements.
AHP assumes the decision maker is rational.
If CR>0.1 it means judgements are Untrustworthy! Because they are too close for comfort of randomness (exercise is worthless must be repeated)
How do you rank the alternatives to get the Benefits Vector, when you have achieved the normalised vectors in AHP?
1) Create the tree again with objective at top, criteria on level underneath and choices for each criteria at the bottom. Write down the calculated priority vector values fo all
2) Now create a priority matrix with the priority values of the alternatives
3) Multiplicate it with the criteria weights from the criteria
4) You get the benefits vector with high number means more benefits
How would you add another criteria to the calculated benefits vector? Example: Cost
1) Given costs for each alternative, normalise the costs just like other vectors
2) Then DIVIDE this vector by the Benefits Vector calculated before
3) Now you have a Cost/Benefit Ratio that can be plotted on a graph where it will be shown in percentage!
What are all steps of AHP?
1) Calculate the priority vector for the decision criteria for their weights
2) Calculate consistency ratio (not in exam)
3) Calculate priority vectors individually for each criteria for ranking
4) Create the tree with the calculated values
5) Calculate the benefits vector
6) Add another criteria if available (such as cost)
7) Plot the calculated cost/benefits values in a graph
What are the decision objectives of the Facility Location Problem?
1) Supply-Side Factors (regarding cost) > Labour cost > Land cost > Energy cost > Transportation cost > Community factors (social cost) 2) Demand-Side Factors (regarding customer service / revenue) > Labour cost > Land cost > Energy cost > Transportation cost > Community factors (social cost)
How does Weber Problem relate to facility location problem?
>
Weights are amounts of demands, should be close to the higher demand Holes are different sites of customers with demand The juncture is where the facility should be located
What are the 3 facility location problems? What are their objectives and decisions variables?
1) P-Center
> Locate facilities while minimising maximum distance to an existing facility
> Decision: maximum distance to an existing facility
2) Covering
> Find the number of new facilities, p, and their locations, X,v to minimize the cost of the new facilities
> yj binary decision variable that is 1 if facility is opened at site j
3) Simple Plant Location
> Minimize total fixed and variable costs of serving the demand point by determining the optimal allocation pattern for all customers
> yj binary decision variable that is 1 if facility is opened at site j
> xij customer demand satisfied
What is the objective function in Strategic Network Planning?
Minimize all variable costs along the supply chain
Decide where to put the production plant
What are the 4 decision variables of Strategic Network Planning?
1) yi Plant is open or not (binary)
2) zw Warehouse is open or not (binary)
3) Xiw Annual Quantity shipped from Plant i to Warehoue w
4) xwj Annual Quantity shipped from Warehouse w to Customer zone j
