Luis G. Vargas

Optimum Determination of Hospital Requirements

The United States spends 8.6 percent of its total gross national product (the highest percentage in the world) on health care systems (Sidel and Sidel, 1977); yet it ranks nineteenth in the world in providing care necessary to decrease mortality and morbidity rates. Conversely there are countries such as Great Britain, whose expenditures are closer to 5 percent, that rank higher in the provision of quality medical care (Silver, 1976). Considerable medical expenditure in the United States goes into duplication of equipment and personnel in a single community and even within a single hospital.

XYZ Research Institute: Planning Resource Allocation under Uncertainty

Planning for research and development is basically a process of prescribing commitments to particular technologies in the future by making resource allocations now. It intrinsically involves tradeoffs among “goods” or “virtues.” It also confronts risks induced by a variety of uncertainties. R&D planning is especially problematic because the time horizon is longer than in most corporate planning of the public and private sectors, and the uncertainties are consequently that much greater.

Outsourcing a Firm’s Application Development Group

Outsourcing Information Technology (IT) functions is a growing trend in businesses looking for ways to reduce cost and hasten time-to-market of customer-facing and internal applications. The strategy of outsourcing functions, tasks, and activities to another company has existed for decades. During periods of recession, U.S. corporations cut costs by moving jobs that are of a repetitive nature to lower-cost regions, typically “offshore” or in non-U.S. countries. For example, manufacturing companies have been leveraging offshore resources since the 1950s, while the off-shoring of IT started about 10–15 years ago with the movement of legacy system maintenance tasks to Ireland and Canada.

Risk and Uncertainty in Portfolio Selection

The objective of the AHP, as established in chapter 2, is to provide priorities (weights) reflecting the importance of activities with respect to multiple criteria ordered in a hierarchical structure. These priorities can be used to allocate a resource such as money among the activities at the lower levels of the hierarchy (see chapter 5). As such, the approach is ideally suited to the allocation of a firm’s resources among the activities in its (1) target production portfolio, (2) corporate portfolio—the activities are the business segments, and (3) investment portfolio.

Critical Choices for Opec Members and the United States: A Hierarchical Search for Their Desired Future

The international oil market is the most complex trade market in the world. The actions taken by one major actor affect the whole world community. The market’s influence not only is felt in the economic affairs of nations but also reaches out to the technical, social, environmental, and political domains, all continually interacting and affecting each other. Some actors who organize and operate this large market belong to the poorest nations; others are multinational corporations; and still others are superpowers whose potential confrontations in the world today include the security of oil sources and oil supplies. The ideologies and politics of the actors are diverse. With such a complex system one cannot possibly make accurate judgments or prescriptions without understanding the interrelationships among the actors and the factors that influence the system. Thus it seems crucial to do long-range planning by scrutinizing the capabilities and behavior of the actors, defining their objectives, investigating their possible future strategies, examining the impact of these strategies on each actor, searching for strategies that could lead to a desired future, and exploring ways that would make such a future attainable. Through this planning we can control the future; we can direct it toward a desired goal and prevent the emergence of disastrous outcomes. Planning would also provide us with the time needed for change and adaptation to a new environment as we proceed toward our desired goal.

Planning: Forward and Backward Processes

Planning is an ongoing decision process whose purposes are: (1) to specify the ideals, objectives, and goals an organization desires to obtain in the future; (2) to define the programs that must be undertaken to achieve these ends; and (3) to procure the resources, create the organization, and control the results of planning implementation.

Some Extensions in Applications and Theory

In this final chapter we summarize the steps of the Analytic Hierarchy Process and discuss its extensions to other areas of prioritization and problem solving. We illustrate an extension dealing with structures more complex than hierarchies: systems with feedback.