SOME CAUTIONARY NOTES ON THE USE OF CONJOINT MEASUREMENT FOR HUMAN JUDGMENT MODELING*

Conjoint measurement has been suggested as a methodology that might be useful in assisting research concerned with the identification of the structural form of a judge's model. This paper synthesizes the results of some recent research that examined the robustness of this methodology. This research suggests that conjoint measurement has three major weaknesses: (1) certain biases exist when diagnosing model structure, (2) model diagnosis is limited to a small set of potential models, and (3) error substantially compromises conjoint measurement's ability to diagnose model structure. An empirical example that demonstrates some of the difficulties of using this methodology with experimental data is also presented.     

AN ANALYSIS OF THE USEFULNESS OF DISAGGREGATED ACCOUNTING DATA FOR FORECASTS OF CORPORATE PERFORMANCE*

The purpose of this paper is to derive the conditions under which disaggregated accounting data contribute to more accurate forecasts of corporate performance. A comparison formula is derived and applied to actual data. The results obtained indicate that disaggregated data do not necessarily produce better forecasts of corporate performance than do aggregated data. The paper concludes with implications of the results to some reporting issues.     

A MULTIATTRIBUTE DECISION-MAKING APPROACH TO THE SELECTION OF AN AUXILIARY DEVICE FOR ICEBREAKERS*

This paper describes the use of multiattribute decision making by the U.S. Coast Guard when choosing the most appropriate auxiliary device to use on an icebreaker. Five different missions of icebreakers are defined, and the objectives and attributes that describe the effectiveness of each auxiliary device in accomplishing these missions are established. For each geographical area of interest, the missions are weighted using the analytical hierarchy process. Also, group utilities are developed for attribute vectors in order to incorporate the judgments of different icebreaker operators.     

AN APPROACH FOR IMPROVED INTERPRETATION OF MULTIVARIATE ANALYSIS *

This paper proposes a method, canonical rotation analysis, which facilitates the substantive interpretation of results in multivariate analysis. Canonical rotation analysis is developed as a model which integrates multivariate least squares approaches and the varimax rotation criterion. The generalized applicability of the model to canonical correlation, multiple discriminant analysis, and multivariate analysis of variance is developed. The advantages and limitations of canonical rotation analysis are discussed and illustrated in the context of an industrial marketing research problem.     

DUAL-METRIC MEASUREMENT OF THE IMPACT OF COMPLEXITY ON DECISION QUALITY*

Both sophisticated and unsophisticated subjects were provided either a simple or a complex cue set at random on which to base decisions. A dual-metric approach that consisted of measuring interrater consistency and cross-item variance for each subject category was used to compare the decision quality of the subjects. Although complexity and decision quality were inversely related, the sophisticated subjects performed relatively better using the complex cue set; the unsophisticated subjects performed better using the simple cue set. These findings support the notion that decision-maker and task compatibility are important to the assessment of decision quality.     

AN EMPIRICAL INVESTIGATION OF THE DIMENSIONALITY OF THE CONCEPT OF INFORMATION *

An empirical study is described that derives the dimensionality of the concept of information. The resulting information structure was found to be in agreement with the structures suggested in the literature. Additionally, subject evaluations of three distinct report formats were determined using the derived dimensions of information. A graphical format was found to be preferred over both a tabular format and a bar chart format.     

THE CONCEPT AND MEASUREMENT OF CENTRALITY–AN INFORMATION APPROACH

The complexity of interdependent structural systems greatly complicates the analysis of any single structure. This is particularly the case when a structure represents some behavioral process. For this reason it is necessary to devise measures which can differentiate qualitatively and quantitatively between structures as well as between subsets (or points) of a particular structure. For example, consider the authority structures of two different organizations. They exhibit similarities and differences which a behavioral analyst tries to identify and explain. Typically, both similarities and differences are compared by structural indices which, on the basis of past data and prior information, tend to reflect certain organizational traits. The purpose of this paper is to investigate one particularly important index—centrality. Centrality conveys the notion that points in a structure are not all ‘equal’. This ‘inequality’ vis-a-vis the structure creates a situation in which certain points will be more ‘central’ than others. In this paper we first identify the characteristics of centrality and observe how they may relate to behavioral research. We then develop a procedure for measuring centrality which is based on information theory.     

THE DEVELOPMENT OF AN INTEGRATIVE CURRICULUM IN AN UNDERGRADUATE BUSINESS PROGRAM*

This paper describes how the core portion of the undergraduate business program at Indiana University was revised to facilitate integration of basic functionally oriented decision making skills and thus help students gain a deeper understanding of the interdependence of business decisions. It relates, in essence, why and how a single computer-oriented case study which demanded a solution to a large-scale, unified finance-marketing-production problem was used at Indiana University, mentions how we plan to accomplish further integration of functional material, and provides some insight into student reaction to what was, in fact, a massive project from both student and administrative points of view.     

COMPARATIVE PRODUCT TESTS IN THE CONSUMER DECISION PROCESS: CORRELATES OF USE AND IMPACT ON SATISFACTION *

Information inputs are an important determinant of the quality of outcomes in the consumer decision process. This paper reports on an exploratory study that examines the perceived use of Consumer Reports product tests in a specific durable-product purchase in a nationwide sample of Consumer Reports subscribers. Perceived use of Consumer Reports is found to be related to performance-oriented shopping, but other situation-related variables are less likely to be associated with use than the shopper's general confidence in the test reports as an information source. Perceived use of the test reports in this study is associated with higher satisfaction with the products purchased.     

A MODEL FOR THE PREDICTION OF JUROR DECISIONS*

A logit model approach designed to assign a probability whether prospective jurors will favor the defendant or plaintiff in a case, as a function of perceived individual juror characteristics, is described in the context of a case situation. The model, which has been programmed on a hand-held computer, is designed for implementation in courtroom settings to help defense attorneys evaluate and select jurors in order to minimize the likelihood of large jury awards. Empirical tests of the model are also described.     

THE VALIDITY OF THE INDEPENDENT INCREMENTS ASSUMPTION FOR PRODUCTION: AN EMPIRICAL STUDY OF AN AUTOMOTIVE ASSEMBLY PLANT

In assembly plants, random line stoppages cause production variability. For analytic tractability and data availability, researchers commonly assume that the production process possesses the independent increments property (necessary for a process to be Poisson). If the production process has independent increments, then the production in any interval is independent of the production in any other nonoverlapping interval. This property means, for one thing, that the current period's production is never influenced by previous production periods. Intuition, however, suggests that current production could be correlated to past production-violating this assumption of independence. If production problems persist from one period to the next, then one would expect the production in adjacent time periods to be correlated. Although the independent increments property is oflen assumed, its validity has not been demonstrated in practice. We analyze data from an automotive assembly plant to assess the validity of the independent increments assumption for its production.     

AN EMPIRICAL EXAMINATION OF THE BIASING EFFECTS OF FRAMING ON BUSINESS DECISIONS*

This paper presents results of three studies testing whether decision bias due to framing, found in consumer purchase contexts, also would occur in a business setting. In the first study, business-student subjects displayed framing-induced decision bias just as subjects had in an earlier study by Tversky and Kahneman [12]. When the consumer problem was recast into a business decision in the second study, student subjects trained to handle the problem still revealed bias, although to a lesser extent. In the third study, experienced business managers revealed the same pattern of decision bias as the student subjects. Implications of this bias for business decision makers are discussed.     

AN OPERATIONAL APPROACH TO THE EVALUATION OF LEASES BY HOSPITALS*

The evaluation of the lease versus purchase alternative by not-for-profit hospitals presents a problem that stems from the interaction between investment and financial decisions. This paper provides an analytical framework that resolves this issue by neutralizing the impact of the lease contract on the hospital's financial structure and debt capacity. The formulation incorporates the special operating characteristics of not-for-profit hospitals: namely, they are not subject to federal income tax, and part of their revenue is generated through cost-based reimbursement.     

AN ANALYSIS OF CAPACITY PLANNING PROCEDURES FOR A MATERIAL REQUIREMENTS PLANNING SYSTEM*

This paper is concerned with planning work-center capacity levels in manufacturing firms that employ a material requirements planning (MRP) system. It presents four procedures for developing work-center capacity plans designed to insure the production of components and assemblies as specified by the MRP plan and the master production schedule (MPS). These procedures (capacity planning using overall factors, capacity bills, resource profiles, and capacity requirements planning) are compared using simulation analysis. The results indicate that the performance of a procedure when measured against the MPS depends on the operating conditions of the manufacturing system. The results also indicate that the choice of a particular procedure often represents a compromise among the benefits of improved MPS performance, the costs of preparing and processing data, and the premium expenses required for more frequent adjustments in work-center capacity levels.     

PRODUCT AND SERVICE QUALITY: THE ANTECEDENTS OF CUSTOMER LOYALTY IN THE AUTOMOTIVE INDUSTRY

Prior literature has examined product quality and service quality separately as antecedents of customer loyalty. In the context of the automotive industry, we present a framework that examines the simultaneous impact of product and service quality on consumers' purchase intentions. The framework is operationalized as several hypotheses that posit relationships between service quality, service satisfaction, product quality, and customer loyalty. The hypotheses are tested using three sources of data: (i) archival data on product quality and customer purchases, (ii) consumersíresponses to a survey instrument, and (iii) Consumer Reports. Results indicate general support for main hypotheses proposed.     

A LOGIT-MARKOVIAN MODEL OF CONSUMER PURCHASE BEHAVIOR BASED ON EXPLANATORY VARIABLES: EMPIRICAL EVALUATION AND IMPLICATIONS FOR DECISION MAKING*

This study describes and empirically evaluates an approach to modeling purchase behavior that integrates a Logit-Markov-based multivariate brand-choice model structure with stochastic components. Using actual market data for a frequently purchased consumer product obtained from a consumer purchase panel survey, the paper highlights some marketing applications of the model. Given its general structure, the model can aid marketing managers in defining and evaluating target market segments and in assessing the impact of alternative marketing strategies.     

TESTING THE ROBUSTNESS OF MULTIATTRIBUTE UTILITY THEORY IN AN APPLIED SETTING*

Multiattribute utility theory (MAUT) was employed to model the professional judgments of external auditors. Fully developed MAUT models elicited from each subject according to keeney and Raiffa's [6] procedures were used to predict the internal control systems evaluations made by auditor-subjects. Correlation analyses were used to compare the predictive ability of the “correct” MAUT models to the accuracy of models developed under simplifications of the MAUT procedures. One simplified model resulted from relaxing the requirements for attribute independence that determine the functional forms. A second modified MAUT function was formed using unitary weightings on conditional utility functions instead of elicited scaling constants. Tests showed essentially no significant differences in predictive accuracy among the models in the contact of this study.     

TOWARD A PSYCHO-TECHNICAL SYSTEMS PARADIGM OF ORGANIZATIONAL MEASUREMENT*

This paper proposes the need to revise the traditional paradigm of measurement as it applies to organizations. It develops the notion that measurement in an organizational context must be viewed as a “psycho-technical system,” a technology that is intended to influence behavior, including management decisions. It examines the functions of measurement as a psycho-technical system and presents proposed criteria consistent with this revised view of organizational measurement.     

AN EFFICIENT METHOD FOR DETERMINING THE WAITING TIME DISTRIBUTION OF QUEUES

This paper presents a practical method for determining the waiting time distribution of a single-stage queueing system for general distribution of inter-arrival/service times. The method requires the matrix solution of Lindley's equation for waiting time distribution by treating time in discrete units. Some important characteristics of the method are: a) it is easily programmable; b) it has high accuracy; c) it has modest CPU time and storage requirements; and, d) it requires no mathematical functional form for inter-arrival/service time distributions.