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Introduction to Multicriteria Analysis

This document introduces multicriteria decision making (MCDM). MCDM involves making decisions with multiple objectives/criteria, and can be used in situations like designing health policies or choosing a college major. MCDM problems have multiple, sometimes conflicting criteria and may involve both qualitative and quantitative factors. Solutions to MCDM problems are often non-conclusive and can include non-dominated or preferred alternatives. Common MCDM methods include scoring methods, which evaluate alternatives based on scores/utilities, and compromising methods, which select the alternative closest to an ideal solution.

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Luis Dario Alvarez Toscano
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7 views9 pages

Introduction to Multicriteria Analysis

This document introduces multicriteria decision making (MCDM). MCDM involves making decisions with multiple objectives/criteria, and can be used in situations like designing health policies or choosing a college major. MCDM problems have multiple, sometimes conflicting criteria and may involve both qualitative and quantitative factors. Solutions to MCDM problems are often non-conclusive and can include non-dominated or preferred alternatives. Common MCDM methods include scoring methods, which evaluate alternatives based on scores/utilities, and compromising methods, which select the alternative closest to an ideal solution.

Uploaded by

Luis Dario Alvarez Toscano
Copyright
© All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd

An introduction to the

Multicriteria Analysis

Antonio Hoyos
jahoyosch@[Link]

Facultad de Ingeniería
Departamento de Ingeniería Industrial
Antonio Hoyos PE&AD October, 2017
Introduction
• Multicriteria decision making (MCDM)
– Make decisions in presence of multiple criteria.
(objectives).
– Apply for many real situations.

Think about
– Desing a health policy
– Building an airport
– Looking for a job
– Looking for a major
– Get a boy (gilr) friend
(Xu & Yang, 2001)
Antonio Hoyos PE&AD October, 2017
Introduction
See a example

• Looking for a mayor in the UDEA

– Job market upon graduation


– Job pay and opportunity to progress
– Interest in the major
– Likelihood of success in the major
– Future job image
– Parent wish How to decide?
– Social status
(Xu & Yang, 2001)
Antonio Hoyos PE&AD October, 2017
Main features of MCDM
MCDM problems can have discrete or continuos solutions.
These are their main features.

• Multiple criteria/attributes often form a hierarchy


• Conflict among criteria
• Hybrid nature
– Incommensurable units
– Mix of quantitative and qualitative attributes
– Mix of sthocastic and deterministic attributes
• Uncertainty
– Subjective judgments
– Lack of data or incomplete information
• Large scale
• Assessment may not be conclusive
(Xu & Yang, 2001)
Antonio Hoyos PE&AD October, 2017
MCDM Solutions
Frecuently this kind of problems don´t have an conclusive solution.

• Ideal solution: maximise all profit criteria and minimise all cost
criteria. Almost always exist. Is the best of the best.

• Non-dominated solutions: a set of alternatives that are not


dominated.

• Satisfying solutions: are alternatives that superate the decision


maker’s expectations. May not be a non-dominated solution.

• Preferred solutions: is a non-dominated solution that best


satisfies the decision maker´s expections.
(Xu & Yang, 2001)
Antonio Hoyos PE&AD October, 2017
MCDM Methods
There are two kinf of methods, compensatory and not
compensatory.

Non-compensatory: do not permit tradeoffs between attributes.


An unfavourable value in one attribute cannot be offset by a
favourable value in other attributes

Compensatory: permit tradeoffs between attributes. A slight


decline in one attribute is acceptable if it is compensated by
some enhancement in one or more other
attributes.

(Xu & Yang, 2001)


Antonio Hoyos PE&AD October, 2017
Non-compensatory methods
Examples of these methods included:

• Dominance method
• Maxmin method
• Maxmax method
• Conjunctive constraint method: attribute against a standar
• Disjunctive constraint method: best attribute regardlees of all
other attributes.

Are not useful for general decision making


(Xu & Yang, 2001)
Antonio Hoyos PE&AD October, 2017
Compensatory methods
Can be classified in:

• Scoring methods: selects or evaluates an alternative


according to its score (or utility). Utility or score is used to
express the decision maker’s preference.

• Compromising methods: selects an alternative that is closest


to the ideal solution.

• Concordance methods: generates a preference ranking which


best satisfies a given concordance measure.

(Xu & Yang, 2001)


Antonio Hoyos PE&AD October, 2017
References
• Xu, L., Yang, J. (2001). Introduction to multicriteria decision
making and the evidential reasoning approach. Working paper
[Link]://[Link]/Portals/49/docs/jyang/X
uYang_MSM_WorkingPaperFinal.pdf

Antonio Hoyos PE&AD October, 2017

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