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A Systematic Approach to Comparative Decision-Making Using Pseudo inverses

Published Date: 
Jul 24, 2012

There exist a number of circumstances in businesses where we make comparative decisions. Whether it be a set of ideas, concepts, or people, what we essentially assume is that there exists some "potential" associated with each one of them, and we assign values to those potentials by comparing them with one another. This is a very difficult problem if the number of “substances under comparison” is large. Here it is beneficial to split the problem into small, simpler problems and solve them all at once. It is also beneficial to get a quantitative measure of our understanding about the problem we are solving. Here, in this paper, we show how to take the bigger problem, split it into smaller problems, form a set of linear equations and solve these equations using standard techniques from linear algebra. The method here also evaluates our understanding about the problem and the requirement for a thorough evaluation.

In essence, this whitepaper provides a systematic approach to effectively compare options by reducing the subjectivity and noise which hinders effective “present-day decision making.”

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