Authors : Mohammad H. Almomani, Adam Baharum and Rosmanjawati Abdul Rahman
Abstract: Three-stage procedure is used to select one of the best simulated designs with high probability. This procedure involves three stages that consists the ordinal optimization approach, subset selection approach and indifference-zone approach. Normally the three-stage procedure focuses on the probability of correct selection as a measure of selection quality. Another measure of selection quality is the expected opportunity cost of a potentially incorrect selection where the opportunity cost in the simulation selection problem is defined as the difference of unknown mean between the selected best design and the actual best design. In this study, we select a good simulated design using the three-stage procedure and utilizing the expected opportunity cost of a potentially incorrect selection. The results of the numerical example show that the procedure selects a good simulated design with high probability and minimum expected opportunity cost.
Mohammad H. Almomani, Adam Baharum and Rosmanjawati Abdul Rahman, 2010. Three-Stage Procedure and Expected Opportunity Cost for Selecting a Good Simulated Design. Research Journal of Applied Sciences, 5: 417-423.