Logical Decisions® Portfolio (LDW Portfolio) is a supplement to Logical Decisions that lets you select a group of alternatives instead of a single alternative based on the LDW ranking results.
LDW Portfolio is designed for situations where you want to select a set of alternatives based on budgetary and other constraints. The most common application where this situation comes up is in selecting a set (or "portfolio") of research and development (R&D) projects to fund based on a limited total budget. When selecting the projects you want to pick those projects that have the best expected performance relative to their price. That is, you want to get the most "bang for the buck."
LDW Portfolio uses the ranking results from an LDW analysis for the "bang" part of the equation. It then lets you add cost and other information to identify the portfolio of alternatives that best meet your needs.
More details about LDW Portfolio
LDW Portfolio is an Excel add-in that takes the output from an LDW model. You enhance the LDW model by adding budget and other constraints. LDW Portfolio then performs an optimization that finds the set of alternatives that has the maximum total benefit while meeting your budgetary and other constraints. LDW Portfolio performs a true optimization using 0-1 integer programming – a method from the field of operations research that can find the very best set of alternatives that meet the constraints.
LDW Portfolio is tightly linked with LDW. The LDW Portfolio uses the overall benefit (utility) scores for the alternatives from LDW as the basis for its optimization. It also can import the cost and resource usage information for each alternative directly from LDW.
LDW Portfolio can include cost and budget information for many years. You can define a budget for each year and a cost for each alternative for each year. The optimization engine will make sure that the selected alternatives cost less than the allowed budget for every year that you define. LDW Portfolio also lets you fund only a portion of the budget requested for each alternative. You can define an alternate, "allowed" budget for each alternative and define the percentage of the total benefit for the alternative that is retained if the alternative is funded at the lower "allowed" level.
You can experiment with the effects of different budgetary and other constraints by defining different "scenarios." Each scenario has its own budget for each year and can also have its own set of programmatic constraints.
LDW Portfolio allows a variety of programmatic constraints.
¯ You can force any alternative into or out of the final selection.
¯ You can add if-then constraints that ensure that alternative A is only chosen if alternative B is also chosen.
¯ You can define groups of alternatives and force all of the alternatives in the group into or out of the selection, force either one or none of the alternatives to be selected, all or none of the alternatives to be selected, exactly one of the alternatives to be selected or at least one of the alternatives to be selected.
¯ You can add resource constraints such as available personnel and ensure that your selected alternatives don’t use more than the available amount of the resource.
¯ Finally, you can add allocation constraints that specify a minimum percentage of the budget that must be spent on alternatives belonging to a particular group.
All of these constraints can be added in an easy, intuitive way that shields you from the complexities of the model structure.
