Decision Framing and Measurement · Lesson 3

Decision Rules and Sensitivity Analysis

12 min read

Lesson objectives

  • Evaluate turning scores into action rules and testing ranking stability and issue a reviewable conditional decision.

A distributor compares three supply-hub sites on five criteria weighted 30/25/20/15/10 while demand may vary by plus or minus twenty percent.

A decision rule converts measures into action. It begins with non-compensable eligibility constraints and then ranks eligible alternatives using declared utility. A high score cannot rescue a site that violates capacity or safety.

Separate gates from the weighted matrix, normalize measures on a documented scale and rerun the ranking over plausible demand and weight ranges. Record the flip point instead of hiding it in an average.

Weights express preferences rather than natural facts. Safety and minimum service cannot become compensable weights, and correlated criteria require a double-counting check.

Separate gates from the weighted matrix, normalize measures on a documented scale and rerun the ranking over plausible demand and weight ranges. Record the flip point instead of hiding it in an average.

Suppose sites A, B and C score 82, 79 and 75. A leads B by only three points. Raising flexibility weight from twenty to thirty and lowering cost weight from thirty to twenty may move B first, while a capacity failure at plus-twenty-percent demand disqualifies any site regardless of score.

Choose A only if peak capacity passes and its lead remains within the agreed range. If a small change reverses the order, make the recommendation conditional on new capacity evidence or negotiation.

Weights express preferences rather than natural facts. Safety and minimum service cannot become compensable weights, and correlated criteria require a double-counting check.

Lesson summary

Advanced application of turning scores into action rules and testing ranking stability in a realistically constrained decision.