MULTI CRITERIA DECISION MAKING MODELS: AN OVERVIEW ON ELECTRE METHODS

In portfolio analysis, there are a few models that can be used. Therefore, the aim of this paper is to make an overview on multi criteria decision making models, in particular, on ELECTRE methods. We discuss the different versions of ELECTRE, which exist and why they exist. So, when speaking about ELECTRE methods structure, we have to consider two main procedures: construction of one or several outranking relation(s) procedure, and exploitation procedure. In the exploitation procedure, recommendations are elaborated from the results obtained in the first phase. The nature of the recommendation depends on the problematic: choosing, ranking or sorting. Each method is characterized by its construction and exploitation procedure. For choice problem, we can apply ELECTRE I, ELECTRE Iv, and ELECTRE IS; for ranking problem, we can apply ELECTRE II, ELECTRE III, ELECTRE IV and ELECTRE-SS; and for sorting problem we can apply ELECTRE TRI. Finally, some failings on ELECTRE methods assumptions are discussed, for instance, rank reversals. So, when analyzing portfolio management decision problem, the literature suggests AHP method and PROMETHEE family.CAPM; decision problem; multi criteria decision making models; ELECTRE family; ELECTRE rank reversals

A comparative study of multiple-criteria decision-making methods under stochastic inputs

This paper presents an application and extension of multiple-criteria decision-making (MCDM) methods to account for stochastic input variables. More in particular, a comparative study is carried out among well-known and widely-applied methods in MCDM, when applied to the reference problem of the selection of wind turbine support structures for a given deployment location. Along with data from industrial experts, six deterministic MCDM methods are studied, so as to determine the best alternative among the available options, assessed against selected criteria with a view toward assigning confidence levels to each option. Following an overview of the literature around MCDM problems, the best practice implementation of each method is presented aiming to assist stakeholders and decision-makers to support decisions in real-world applications, where many and often conflicting criteria are present within uncertain environments. The outcomes of this research highlight that more sophisticated methods, such as technique for the order of preference by similarity to the ideal solution (TOPSIS) and Preference Ranking Organization method for enrichment evaluation (PROMETHEE), better predict the optimum design alternative

Mutual benefits of two multicriteria analysis methodologies: A case study for batch plant design

This paper presents a MultiObjective Genetic Algorithm (MOGA) optimization framework for batch plant design. For this purpose, two approaches are implemented and compared with respect to three criteria, i.e., investment cost, equipment number and a flexibility indicator based on work in process (the so-called WIP) computed by use of a discrete-event simulation model. The first approach involves a genetic algorithm in order to generate acceptable solutions, from which the best ones are chosen by using a Pareto Sort algorithm. The second approach combines the previous Genetic Algorithm with a multicriteria analysis methodology, i.e., the Electre method in order to find the best solutions. The performances of the two procedures are studied for a large-size problem and a comparison between the procedures is then made

Decision support system for project monitoring portfolio

Vallejo Antich, RA. (2010). Decision support system for project monitoring portfolio. http://hdl.handle.net/10251/8632.Archivo delegad

Territorial plannnig in a river basin with high erosion level using multicriteria decision methods in cordoba province(argentine)

The erosion-sedimentation-flooding processes in large zones of Argentine are a critical problem that involve complex relationships with technological, economic, social and environmental cause-effect. The increasing of agricultural activities in new areas previously with forestry or pasture could produce irreversible environmental impacts. It is necessary to prepare a spatial plan taking into consideration, economic development, social cohesion, environmental quality and progressive desertification. Multicriteria decision models contribute to the elaboration of that plan and provide an inestimable aid to decision makers. The objective of this paper is to elaborate a multicriteria model applied to the La Colacha Basin (Cordoba-Argentine). La Colacha Basin has 416 km2, it is a representative basin of a dry-sub-humid area where agriculture practices are progressively increased. Ten alternatives have been evaluated combining: (a) Agro-forest-pastoral (ASP), Present use (ACT) e Intensive use (INT), (b) with or without Soil conservation (CS), y (c) with or without Hydrological arrangement of the basin (OH). There have been selected 13 criteria. Different Multi-criteria Decision Methods, both of traditional or developed by the authors, have been used

Multi criteria decision making methods for location selection of distribution centers

In recent years, major challenges such as, increase in inflexible consumer demands and to improve the competitive advantage, it has become necessary for various industrial organizations all over the world to focus on strategies that will help them achieve cost reduction, continual quality improvement, increased customer satisfaction and on time delivery performance. As a result, selection of the most suitable and optimal facility location for a new organization or expansion of an existing location is one of the most important strategic issues, required to fulfill all of these above mentioned objectives. In order to sustain in the global competitive market of 21st century, many industrial organizations have begun to concentrate on the proper selection of the plant site or best facility location. The best location is that which results in higher economic benefits through increased productivity and good distribution network. When a choice is to be made from among several alternative facility locations, it is necessary to compare their performance characteristics in a decisive way. As the facility location selection problem involves multiple conflicting criteria and a finite set of potential candidate alternatives, different multi-criteria decision-making (MCDM) methods can be effectively applied to solve such type of problem. In this paper, four well known MCDM methods have been applied on a facility location selection problem and their relative ranking performances are compared. Because of disagreement in the ranks obtained by the four different MCDM methods a final ranking method based on REGIME has been proposed by the authors to facilitate the decision making process

Land-use suitability evaluation for organic rice cultivation using fuzzy-AHP ELECTRE method

Land conversion to organic agriculture is the answer to land degradation problems that interfere with land resources sustainability. An evaluation of land-use suitability is crucial to measure the appropriateness of land for agricultural cultivation. Specifically, organic rice cultivation has some particular standard criteria such as temperature, rainfall, soil depth, pH, c-organic, slope, erosion level, a transition period that influence ranking results, and land suitability classes. Eight organic farmlands were used as alternatives, namely Sawangan, Mangunsari, Tirtosari, Podosoko, Butuh, Krogowanan, Kapuhan, and Jati. Fuzzy Analytic Hierarchy process is used to determine the level of importance of the criteria based on weight assessments by three agricultural experts. The ELECTRE method is applied to rank the most suitable land from several alternatives for organic rice cultivation. The combination of these two multi-criteria decision-making methods complements each other to solve problems in land suitability evaluation. A web-based decision support system (DSS) was created to accelerate data processing integration and present factual information from the land suitability selection process. The implementation of DSS with fuzzy-AHP ELECTRE for evaluating land-use suitability in organic rice cultivation provided the best score for Tirtosari with Ekl=4 and spearman rank correlation the system comparison results with actual data rs=0.95. This study's results indicate that integrating the web with fuzzy-AHP ELECTRE is quite effectively applied for decision-making in organic farming

Context-Related Scaling of Human Judgement in the Multiplicative AHP, SMART, and ELECTRE

Since decisions are invariably made within a given context, we model relative preferences as ratios of increments or decrements in an interval on the axis of desirability. Next, we sort the ratio magnitudes into a small number of categories, represented by numerical values on a geometric scale. We explain why the Analytic Hierarchy Process (AHP) and the French collection of ELECTRE systems, typically based on pairwise -- comparison methods, are concerned with category judgement of ratio magnitudes, whereas the Simple Multi-Attribute Rating Technique (SMART) essentially uses the orders of magnitude of these ratios. This phenomenon, well-known in psycho-physics, provides a common basis for the analysis of the methods in question and for a cross-validation of their results. Throughout the paper, we illustrate the approach via a well-known case study, the choice of a location for a nuclear power plant

Ranking of hydropower projects based on sustainability criteria in India using multicriteria decision making methods

Assessment of hydropower projects with respect to sustainability criteria is a multidimensional and complex issue. It requires considering technical, environmental, and social parameters instead of purely economic ones in decision making for energy planning. The flexibility to consider several criteria and objectives simultaneously leads to the use of multicriteria decision making (MCDM) methods which are well accepted in the field of energy planning. This paper aims at applying MCDM methods in facilitating the decision makers to select the most sustainable hydropower projects in the Indian region by making real and logical choices based on eight important criteria selected from the literature that are compatible with sustainable development. To comprehensively rank hydropower projects three MCDM methods are applied i.e., the technique for order of preference by similarity to ideal solution (TOPSIS), preference ranking organization method for enrichment evaluations (PROMETHEE II), and elimination and choice translating reality (ELECTRE III). Analytic hierarchy process (AHP) is used to calculate the weights of criteria. All three methods are well adapted for sustainability assessment and ranked Sharavathi (A9), Bhakra (A2), and Upper Indravati (A13) to be the most sustainable hydropower projects in India under the selected criteria. The study will be helpful in sustainable energy planning of hydropower projects with similar geographical conditions