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A chemical company is expanding its operations and a disused woollen mill is to be converted into a processing plant.Four companies have submitted designs for

A chemical company is expanding its operations and a disused woollen mill is to be converted into a processing plant.Four companies have submitted designs for the equipment which will be installed in the mill and a choice has to be made among them.The manager of the chemical company has identified three attributes which he considers to be important in the decision:Cost, Environmental Impact, and Reliability.He has assessed how well each design performs on each attribute by allocating values on a scale from 0 (the worst designs) to 100 (the best).These values are shown below, together with the costs which will be incurred if a design is chosen:

in order it is:

Design

Cost ($)

Environmental Impact

Reliability

A(design)

90,000(cost)

20(impact)

100

B

110,000

70

0

C

170,000

100

90

D

60,000

0

50

Eventually, the manager decides to allocate "Environmental Impact" a weight of 30 and "Reliability" a weight of 70.

  1. Calculate the Aggregate Benefits of each design.
  2. By plotting the benefits and costs of the designs on a graph, identify the designs which lie on the efficient frontier.
  3. Without bothering to actually do the math, simply explain how the manager should now decide among the options on the efficient frontier.

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