The Art of Prioritization - telling "maximizing" from "minimizing" is of crucial importance

Price (when you're a buyer) is a typical example of the "Minimizing" rule. If you buy, you want the price to be as low as possible. Interest, on the other hand, typically represents the "Maximizing" rule. That's when you put your money in a bank and search for the highest rate. It would be the exact opposite if you were the borrower.
That seems easy. So far so good. But in what category would you place some more complex indicators such as CPI, IRR, ROI etc.?



Below is an exercise. There is an indicator on the left and the "rule" to be filled in in the right-most column. Would you know the answers? If it's bigger, is it actually better or worse?
Don't look at the results lower below straight away.

Indicator	Explanation	Rule
CPI	Cost Performance Index
SPI	Schedule Performance Index
CV	Cost Variance
SV	Schedule Variance
IRR	Internal Rate of Return
ROI / ROR	Return on Investment aka Rate or Return
NPV	Net Present Value
CBR	Cost Benefit Ratio
BCR	Benefit Cost Ratio
PP	Payback Period
TCPI	To Complete Performance Index

Indicator	Explanation	Rule
CPI	Cost Performance Index	Max
SPI	Schedule Performance Index	Max
CV	Cost Variance	Max
SV	Schedule Variance	Max
IRR	Internal Rate of Return	Max
ROI / ROR	Return on Investment aka Rate or Return	Max
NPV	Net Present Value	Max
CBR	Cost Benefit Ratio	Min
BCR	Benefit Cost Ratio	Max
PP	Payback Period	Min
TCPI	To Complete Performance Index	Min

It becomes even more interesting when you start evaluating trends.

 What if you had a run chart with positive Cost Variances going down on a curve? Is that good or bad? And what if you had a similar run chart with negative Cost Variances on a curve that goes up? Is this good or bad? It turns out that as far as variances are concerned, "the smaller the better" rule is applied here but in absolute terms which means disregard any plus or minus signs. Then, the closer to zero it is, the better it is regarded.

And how about evaluating an outcome by many different criteria some of which are of "maximizing" nature and some of which are of "minimizing" nature? There are methodologies such as Analytic Hierarchy Process (AHP) that can synthesize several weights into one overall weight thus producing a rank for each evaluated alternative. It converts minimizing criteria into maximizing ones for the purposes of the overall synthesis. More on AHP <<here>>.