Decision Lens has many terms and definitions that we have defined and exemplified below.
In Decision Lens-speak, an Instance is used to describe the workspace for one of our clients. A client's url (http://yourname-dl3.decisionlens.com) is the instance
Portfolio / Model
Within an instance, each unique decision scenario is created as a Portfolio. The term "Portfolio" is seen within Decision Lens. The term Model can be used interchangeably as well.
Example: Build a portfolio to determine which car to buy. This is the example throughout the terms and definitions in this worksheet.
This generic term is used to describe the items that need to be prioritized by the model. This could be Projects, Vendors, Assets, etc.
Example: The alternatives in our model are car choices, listed out as a Toyota Prius, a Honda Civic and a VW Jetta.
Criteria are the set of principles by which alternatives in your model may be judged. These can also be thought of as the benefit or value drivers brought to you by each alternative being evaluated.
Example: The criteria could be Fuel Efficiency, Trunk Space, Driving Dynamics.
Each criterion's weight is an expression of the relative importance of that criterion against all other criteria in the model. Weights can either be manually assigned to all criteria in your model or determined using a pairwise comparison process.
Example: The weights of my criteria within my model are as such: Fuel Efficiency - 40%, Trunk Space - 25%, Driving Dynamics - 35%.
A rating scale is developed for each criterion, designed to elicit quantitative or qualitative information about each alternative. Each rating scale is a medium that converts a ratings input for each criterion of each alternative, provided by either stakeholder judgment or quantitative data, into a numeric value equivalent used throughout the portfolio.
Example: The rating scale for Fuel Efficiency could be "35+ MPG combined, 25-34 MPG combined, Less than 25mpg combined." The rating scale for Trunk space could be "3 or more suit cases, 2 suit cases, 1 suitcase or less."
Once criteria, criteria weights and criteria rating scales are all determined, each alternative can be assessed using the defined rating scale. This rating assessment will be used to determine the performance of each alternative within the portfolio.
Example: Rating the Toyota Prius alternative against the Fuel Efficiency criteria would yield a rating of "35+ MPG combined" from the respective rating scale.
Score is used differently within Decision Lens:
-Rating Scale Score: When an alternative is rated against a criterion's rating scale, the rating is recorded as a numeric value, or score.
-Overall/Total/Priority Score: After an alternative has been rated against all criteria, all numeric rating values are normalized and added together to determine the total score for the alternative. This represents the benefit or value of the alternative as judged by the criteria in the model.
-VROI Score: Represents the relative benefit versus cost ratio of the alternative in relation to the other alternatives when used in the Allocation screen.
Example: The rating that the Toyota Prius alternative received for Fuel Efficiency corresponds to a numeric value. This numeric value would be normalized by multiplying the numeric value by the weight for the respective Criterion "Fuel Efficiency." This normalized value would be added to the normalized values the Toyota Prius receives for all other criteria (Trunk Space and Driving Dynamics) to determine the overall score for this alternative.
The placement of an alternative relative to other alternatives in the portfolio based on total scores. Higher scoring alternatives rank higher than lowering scoring alternatives.
Example: The total score the Toyota Prius received is compared to that of the Honda Civic and the VW Jetta to determine how the Toyota Prius ranks compared to each.
A term used throughout Decision Lens to compare importance between two or more items.
Sensitivity Analysis Priority - This page illustrates a prioritized list of alternatives.
Criterion Priority - With respect to criteria, the highest weighted criterion will have the largest weight in the model and thus, the largest impact on an Alternative's total score.