Journal of the Operational Research Society

, Volume 23, Issue 4, pp 413–431 | Cite as

Robustness and Optimality as Criteria for Strategic Decisions

  • Jonathan Rosenhead
  • Martin Elton
  • Shiv K. Gupta
General Paper

Abstract

The use of "optimality" as an operational research criterion is insufficiently discriminating. Ample evidence exists that for many problems simple optimization (particularly profit maximization) does not represent the aims of management. In this paper we discuss the nature of the problem situations for which alternative decision criteria are more appropriate. In particular the structure of strategic planning problems is analysed. The provisional commitment involved in a plan (in contrast to the irrevocable commitment of a decision) leads to the development of a particular criterion, robustness—a measure of the flexibility which an initial decision of a plan maintains for achieving near-optimal states in conditions of uncertainty. The robustness concept is developed through the case study of a sequential factory location problem.

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Copyright information

© Operational Research Society 1972

Authors and Affiliations

  • Jonathan Rosenhead
    • 1
  • Martin Elton
    • 2
  • Shiv K. Gupta
    • 3
  1. 1.London School of Economics
  2. 2.Institute for Operational Research
  3. 3.University of Pennsylvania

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