Alternative Selection

Quick reference

• 00:05 Now it's finally time to decide on your alternative.
• 00:09 If you didn't specify any costs or other considerations, then you're probably
• 00:14 just going to make your decision based only on the rank of each alternative.
• 00:18 But if you do have any other considerations to take into account,
• 00:22 you'll be able to make much more effective decisions using the value-for-money chart.
• 00:27 So here we're going to go over how to do that.
• 00:32 In my example, I'm comparing different proposals for
• 00:36 how to best allocate government spending.
• 00:38 And in addition to the scores, I also have to take into account the cost for
• 00:43 funding each of these proposals, the confidence in their cost estimates,
• 00:48 and whether or not the proposals fit with the government core business.
• 00:53 I've factored each of these variables in by changing the axes,
• 00:58 the bubble size, and the bubble color.
• 01:01 In general, you want to look at the alternatives in this green quadrant which
• 01:06 shows you the alternatives that have the best value for your money.
• 01:11 And the other thing you want to look at is this orange line here,
• 01:15 which is the efficiency frontier or otherwise known as the Pareto frontier.
• 01:20 This line shows you all of the alternatives that
• 01:22 are unambiguously better than all of the others.
• 01:25 So taking those two things into account,
• 01:29 I see that my best choices would probably be proposal E and proposal W.
• 01:35 Now if I had to made my decision by looking only at the ranks of my
• 01:40 alternatives, then I would have probably chosen proposal
• 01:44 W because that alternative has the highest score.
• 01:48 However, by looking at the chart,
• 01:51 it looks like proposal E might actually be a better option because
• 01:56 it has half the cost of proposal W and only a slightly lower score.
• 02:01 And by looking at the bubble color, you can see that it also fits
• 02:06 better with my government core business than proposal W does.
• 02:10 So these three things combined make me actually lean towards
• 02:15 choosing proposal E even though proposal W has a higher ranking.
• 02:21 Another thing that can be useful when narrowing down your
• 02:25 options is the y/x ratio.
• 02:27 If you have the y-axis set to show the total scores of your alternatives,
• 02:33 and the x-axis to show the cost,
• 02:35 then the y/x ratio is your benefits to cost ratio.
• 02:39 This tells you how much benefit you're getting for the cost.
• 02:43 The higher the y/x ratio, the more benefit you're getting for the cost.
• 02:49 You can see this ratio either by clicking on any alternative on a chart,
• 02:54 and then looking at the details in the menu on the right.
• 02:58 Or you can look at the table below,
• 03:01 which has the y/x ratio of each of the alternatives in one of the columns.
• 03:07 You can sort your alternatives by y/x ratio by clicking on the header,
• 03:12 which will sorted by increasing value or if you click again,
• 03:16 then it'll sort them by decreasing value.
• 03:19 This makes it much easier for you
• 03:21 to see which of your alternatives have the higher benefits to cost ratio.
• 03:27 You can narrow down your choices by filtering out your alternatives
• 03:32 based on any variable like the criteria, the score,
• 03:36 other considerations, or in my case, I want to look at the y/x ratio.
• 03:41 Despite looking at the chart, I'm going to say that I want to look at only
• 03:46 those proposals that have a y/x ratio greater than 2.
• 03:51 I can filter out all the other alternatives by clicking on the light gray
• 03:55 funnel icon up here next to the header and
• 03:58 entering the value I want to filter by, so I'm going to put in greater than two.
• 04:07 And that makes my list so much shorter, and
• 04:10 it also removes a lot of clutter from my chart, which helps me focus only
• 04:15 on the alternatives that are the most promising to me.
• 04:19 Now if you look at the table, you see that actually proposal S and
• 04:23 proposal R have the highest y/x ratio.
• 04:27 So shouldn't those be my most preferable alternatives?
• 04:30 Well on the chart, you see that mostly the high y/x ratio
• 04:35 is because they have such a low cost.
• 04:38 And this is a good example of why you shouldn't rely on this ratio to
• 04:43 find the best value for your money.
• 04:46 Because if you click on proposal S, it shows you that most of the effects of
• 04:50 this proposal are actually either neutral or very small.
• 04:54 So I will gain very little from spending my money on this alternative.
• 05:00 Proposal E on the other hand has stronger results.
• 05:03 So it depends on how much it matters to you to get better results,
• 05:08 but also spend more money.
• 05:10 Notice that the bubble size of proposal E is also smaller than that of
• 05:15 proposal S and R which is actually less desirable to me.
• 05:19 So again, I really have to think about what am I willing to give up for
• 05:24 having a better score?
• 05:26 Once you've decided on an alternative, you can select or
• 05:31 reject any alternative either by clicking on that alternative in the chart and
• 05:36 then clicking on Select or Reject in the menu under right, or
• 05:40 you can go to the table below and click on Select or Reject here.
• 05:45 Once you've done this, this alternative will disappear from the chart.
• 05:49 This is because by default,
• 05:51 the chart only shows you alternatives that are marked as undecided.
• 05:55 But if you want to change this, you can always do so by going to options and
• 06:01 the menu on the right and selecting which alternatives you want to show.
• 06:06 So now that you've decided on an alternative,
• 06:09 it's time to factor in your budget.
• 06:12 This budgeting feature below the table here is going to appear if
• 06:16 you select the x value to represent any summable variable.
• 06:20 So for example the cost, then you're going to see the sums of the costs of
• 06:24 all the alternatives that you've accepted, the ones you've rejected,
• 06:29 and the ones that you haven't yet decided on.
• 06:32 As well as the sum of all of the costs of these alternatives combined.
• 06:37 But keep in mind that these sums only include the alternatives that haven't been
• 06:42 hidden by a filter.
• 06:43 If you want to remove a filter, you can do so either by clicking
• 06:48 on the funnel icon in the appropriate category and clicking Remove, or
• 06:52 by going to the options in the menu on the right and clicking Clear all filters.
• 07:00 Now in the budget field, enter what your budget is, and it'll subtract the cost of
• 07:05 the alternatives you've selected, and tell you how much money you have left to spend.
• 07:11 If you have any money left over, you can either select another alternative or
• 07:16 just choose to do nothing, it's up to you.
• 07:19 This feature is also really useful for any other summable costs, like for
• 07:24 example how much staff you have available to carry out a project.
• 07:28 So now that you know how to select an alternative, go out into the world and
• 07:33 make your best decisions.

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