Are Robustness Measures Robust?
To a large degree, the classical approach to problem solving in operations research (OR) is to fit a real life situation into a well-known OR model. When OR models are used to deal with major policy problems in which the underlying processes are not well understood, this effort results in too much simplification. Due to an inability to perceive all uncertainties, and a consequent wish to retain flexibility once the decisions are made, decisionmakers are more interested in the 'robustness' of their policy decisions than their 'optimality', which becomes a vague concept due to the nature of these problems. This paper emphasizes the desirability of robustness and criticizes attempts to fit an operationalized measure of robustness into an optimization structure, by the aid of a decision analytic example. (Author).
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alternatives considered analysis Application assumptions author's Bigelow calculate robustness values communicating the insights cost criterion criticizes attempts crude oil cutoff point cutoff values decision tree decisionmakers demand turns different alternatives different objectives dimensions under consideration displaying information drawbacks example FIGURE IA Graph high demand high production INDIANA UNIVERSITY inherent trade-offs initial decision Insensitivity insights gained investments are undertaken level of imports low demand low import low production measure of robustness measure robustness medium demand medium imports medium production mization modelling effort nature picks number of alternatives number of satisfactory oil production operationalizing the idea operations research opti optimal solution paper policy problem probabilities production levels Rand Corporation recent trends respect to robustness Retained Flexibility robust solutions robust with respect robustness measures mentioned satisfac Satisfactory cutoff satisfactory outcomes Sensitivity subjective decision suggested using robustness tory outcomes Type Z problems unbalanced payoff values uncertainties unmodelled issues unperceived value of crude Yilmaz Arguden