MCDM Y. İlker TOPCU, Ph.D twitter.com/yitopcu

Özgür Kabak Assistant Professor İstanbul Technical University Department of Industrial Engineering / 2039

Schedule

Intentional and reflective choice in response to perceived needs (Kleindorfer et al., 1993) Decision maker’s (DM’s) choice of one alternative or a subset of alternatives among all possible alternatives with respect to her/his goal or goals (Evren and Ülengin, 1992) Solving a problem by choosing, ranking, or classifying over the available alternatives that are characterized by multiple criteria (Topcu, 1999) Decision Making

Multicriteria Decision Making A single DM is to choose among a countable (usually finite) or uncountable set of alternatives that s/he evaluates on the basis of two or more (multiple) criteria (Korhonen et al., 1992; Dyer et al., 1992) MCDM consists of constructing a global preference relation for a set of alternatives evaluated using several criteria (Vansnick, 1986) The aim of any MCDM technique is to provide help and guidance to the DM in discovering his or her most desired solution to the problem (Stewart, 1992)

Multicriteria Decision Making Multiple criteria: each problem has multiple criteria, which can be objectives or attributes. Conflicting among criteria: multiple criteria conflict with each other. Incommensurable unit: criteria may have different units of measurement. Design/selection: solutions to an MCDM problem are either to design the best alternative(s) or to select the best one among previously specified finite alternatives.

MADM – MODM A differentiation can be made w.r.t. number of alternatives: Multi Attribute Decision Making – MADM Cases in which the set of decision alternatives is defined explicitly by a finite list of alternative actions – Discrete alternatives Multi Objective Decision Making – MODM Those in which a is defined implicitly by a mathematical programming structure – Continuous alternatives

Multi Attribute Decision Making MADM is making preference decisions (selecting, ranking, classifying, screening, prioritizing) over the available alternatives (finite number) that are characterized by attributes (multiple, conflicting, weighted, and incommensurable) (Yoon & Hwang, 1995)

MADM Problem Statements Problématiques: Choice (  ) Classification/Sorting (  ) Ranking (  )

Choice Isolate the smallest subset liable to justify the elimination of all other actions Selecting a subset, as restricted as possible, containing the most satisfactory alternatives as a compromise solution

Classification Sorting alternatives and assigning each of them into prespecified / predefined categories

Ranking Building a partial or complete pre-order as rich as possible Ranking (all or some of) alternatives by decreasing order of preference

Decision Making Process 1.Structuring the Problem Exploring the issue and determining whether or not MADM is an appropriate tool: If so, then alternatives for evaluation and relevant criteria can be expected to emerge 2.Constructing the Decision Model Elicitation of preferences, performance values, and (if necessary) importance 3.Analyzing (Solving) the Problem Using a solution method to synthesize and explore results (through sensitivity and robustness analyses)

Multi Attribute Decision Making Methods Elementary Methods Value Based Methods Simple Additive Weighting Weighted Product TOPSIS Outranking Methods AHP/ANP Methods