The expected utility theory applied to an industrial decision problem - what technological alternative to implement to treat industrial solid residuals
This paper presents a method developed to solve industrial decision problems based on Expected Utility Theory. The approach involves five steps: (1) Structuring of the decision problem - this task encompasses the listing of the main objectives, technological alternatives available and the definition of the attributes of the decision problem, (2) construction of the scales to measure the attributes. (3) testing of the independence conditions needed to validate the final multiattribute utility model. (4) assessment of utility trade-offs between the attributes and construction of the final multiattribute utility model, (5) assessment of the utility of every alternative with respect to all the attributes and subsequent ranking of them, This method has been used to choose the best technological solution to treat industrial solid residuals produced by a particular mill. In order to apply the method information was gathered by interviewing the technical staff. Finally, the sensitivity of the solution to the weights of the most important attributes was evaluated. The Multiattribute Utility Theory proved to be a very suitable approach to deal with industrial decision problems. Furthermore, the sensitivity analysis corroborate the conflicts of the decision panel regarding the criteria involved.
multiattribute utility theory sensitivity analysis additive models industrial residuals treatment