Question

Problem 15.16. You are an up-and-coming developer in downtown Seattle and are interested in constructing a building on a site you own. You have collected four bids from prospective contractors. The bids include both a cost ($millions) and time to completion (months):

Contractor	Cost	Time
A	100	20
B	80	25
C	79	28
D	82	26

Who gets the job? Suppose mutual additive independence and cost is equally important as Time.

Note: Can you please solve using a multi-attribute utility function (Additive independence)???

Answer 1

As it is stated in the question the cost and time both have the same weights so we'll calculate the utility for all contractors and then the contractor with the highest utility will get the job.

U_A = 0.5 * (100 + 20) = 60, => because it assumes additive independence and have equal weightage.

UB = 0.5 * (80 + 25) = 52.5

UC = 0.5 * (79 + 28) = 53.5

UD = 0.5 * (82 + 26) = 54

From the utilities it is clear that U_A > U_D > U_C > U_B . So, "A" should get this job.