Extending the combined use of scenarios and multi-criteria decision analysis for evaluating the robustness of strategic options

Deep uncertainty exists when there is disagreement on how to model inter-relationships between variables in the external/controllable and internal/controllable environment; how to specify probability distributions to represent threats; and/or how to value various consequences. The evaluation of strategic options under deep uncertainty involves structuring the decision problem, specifying options to address that problem, and assessing which options appear to consistently perform well by achieving desirable levels of performance across a range of futures. The integrated use of scenarios and Multi-Criteria Decision Analysis (MCDA) provides a framework for managing these issues, and is an area of growing interest. This thesis aims to explore such integrated use, suggesting a new method for combining MCDA and scenario planning, and to test such proposal through a multi-method research strategy involving case study, behavioural experiment and simulation. The proposal reflects the three key areas of confluence of scenarios and MCDA in the decision making process. The first is based on systematic generation of a larger scenario set, focused on extreme outcomes, for defining the boundaries of the decision problem. The second proposal is based on providing less scenario detail than the traditional narrative, in favour of explicitly considering how uncertainties affect positive and negative outcomes on key objectives. This backward logic seeks to better address the challenge of estimating the consequences of each option and the trade-offs involved. Finally, it is proposed that option selection be based on a concern for robustness through cost-equivalent regret. The empirical findings reflect that the key benefit of integration appears to be a mechanism to improve the efficiency of elicitation and the robustness of options. However, effective application of scenarios and MCDA requires awareness of the desired degree of accuracy required and risk attitude of decision makers

Development, test and comparison of two Multiple Criteria Decision Analysis(MCDA) models: A case of healthcare infrastructure location

When planning a new development, location decisions have always been a major issue. This paper examines and compares two modelling methods used to inform a healthcare infrastructure location decision. Two Multiple Criteria Decision Analysis (MCDA) models were developed to support the optimisation of this decision-making process, within a National Health Service (NHS) organisation, in the UK. The proposed model structure is based on seven criteria (environment and safety, size, total cost, accessibility, design, risks and population profile) and 28 sub-criteria. First, Evidential Reasoning (ER) was used to solve the model, then, the processes and results were compared with the Analytical Hierarchy Process (AHP). It was established that using ER or AHP led to the same solutions. However, the scores between the alternatives were significantly different; which impacted the stakeholders‟ decision-making. As the processes differ according to the model selected, ER or AHP, it is relevant to establish the practical and managerial implications for selecting one model or the other and providing evidence of which models best fit this specific environment. To achieve an optimum operational decision it is argued, in this study, that the most transparent and robust framework is achieved by merging ER process with the pair-wise comparison, an element of AHP. This paper makes a defined contribution by developing and examining the use of MCDA models, to rationalise new healthcare infrastructure location, with the proposed model to be used for future decision. Moreover, very few studies comparing different MCDA techniques were found, this study results enable practitioners to consider even further the modelling characteristics to ensure the development of a reliable framework, even if this means applying a hybrid approach

Systematic Regional Planning for Multiple Objective Natural Resource Management. A Case Study in the South Australian River Murray Corridor.

The aim of this study is to assess the feasibility of different policy options for encouraging the large scale NRM actions required for achieving stated regional resource condition targets for NRM. To achieve this, the concept of systematic regional planning is developed to identify geographic priorities for NRM actions that most cost effectively meet multiple-objective regional targets based on established biophysical and economic principles.Water;Australia;Rivers;Biodiversity;Natural Resource Management;Revegetation

Methodology applied to managerial decision-making in the context of COVID-19

Purpose – This paper aims to propose a methodology for managerial decision-making based on scenario planning and a multi-criteria approach. Design/methodology/approach – The methodology consists of two stages, one referring to scenario planning, and the other to multi-criteria decision-making. The methodology was applied to a company in the Brazilian agribusiness sector, aiming to help managers face the current situation of the COVID-19 pandemic. Findings – The proposal addresses a set of simple methods for developing a scenario analysis based on different approaches. Although the methodology may allow the future addition of new, perhaps more robust strategies, the purpose of the analysis is not only to tell the decision maker which strategy should be adopted, but also to provide greater knowledge about the problem and possible scenarios. Originality/value - The contribution of this research is to propose a structured and easily applicable methodology that can help managers in the future planning of their companies, especially when faced with complex decisions and high level of uncertainty

A multi-methodological combination of the Strategic Choice Approach and the Analytic Network Process: from facts to values and vice versa

The paper proposes a new multi-methodological framework combining a Problem Structuring Method and a Multi-Criteria Decision Analysis to address the problem of composing facts and values in the decision-making process of policy making. We position our work theoretically in relation to Latour’s concept of the "collective" as a potential description of the decision-making process, with its conflicts and negotiations, openings and closures. With Latour, we can say that there are no "separate chambers" in which facts (i.e., the use of public resources, different time horizons) and values (i.e., the values of different stakeholders, the legitimacy of public decisions) are discussed; rather, all these aspects are considered together in a cycle that encompasses them, progressively expanding and contracting to arrive at a tangible result: a decision. In the paper we illustrate the transposition of the concept of this cycle in our multi-methodology, the proposal of the combination of the Strategic Choice Approach (SCA) and the Analytic Network Process (ANP)—which is absent in the literature—and we then empirically test this theoretical contribution with a case study, the repurposing of a former hospital in Ital

Planning for resilient water systems - a water supply and demand investment options assessment framework

The Managing Directors of the four Melbourne water businesses have set out a clear vision for the future role of water in shaping a sustainable, liveable, prosperous and healthy city. The Melbourne Water Supply Demand Strategy (WSDS) is a 50-year strategy to balance the supply of water to meet Melbourne’s consumptive, environmental, industrial and agricultural water needs. The strategy examines long-term future supply augmentations for the city. The last Melbourne WSDS was completed in 2006. The next Melbourne WSDS is due for completion in March 2012, and is one of the key mechanisms through which the Managing Directors’ vision can be achieved. The Institute for Sustainable Futures was contracted by the Smart Water Fund to develop an options assessment framework for the preparation of water supply demand investment strategies, including the forthcoming WSDS, that will meet the MDs’ broad vision. This options assessment framework brief indicates there is now widespread recognition across the Melbourne water businesses that a generational shift is required away from conventional deterministic planning towards more flexible and adaptive planning and management. This shift is being driven by the need to maintain water security in the face of increasing uncertainty in key determinants of water businesses, as well as by increasing determination to broaden the objectives that a water system should meet. For example, the recent dry period highlighted that the role of water in a city is wider than that of a commodity. In addition, feedback from key city stakeholders indicates that there is an opportunity for the water sector to play a larger role in actively shaping the future of our city

A review of methodologies applied in Australian practice to evaluate long-term coastal adaptation options

Rising sea levels have the potential to alter coastal flooding regimes around the world and local governments are beginning to consider how to manage uncertain coastal change. In doing so, there is increasing recognition that such change is deeply uncertain and unable to be reliably described with probabilities or a small number of scenarios. Characteristics of methodologies applied in Australian practice to evaluate long-term coastal adaptation options are reviewed and benchmarked against two state-of-the-art international methods suited for conditions of uncertainty (Robust Decision Making and Dynamic Adaptive Policy Pathways). Seven out of the ten Australian case studies assumed the uncertain parameters, such as sea level rise, could be described deterministically or stochastically when identifying risk and evaluating adaptation options across multi-decadal periods. This basis is not considered sophisticated enough for long-term decision-making, implying that Australian practice needs to increase the use of scenarios to explore a much larger uncertainty space when assessing the performance of adaptation options. Two Australian case studies mapped flexible adaptation pathways to manage uncertainty, and there remains an opportunity to incorporate quantitative methodologies to support the identification of risk thresholds. The contextual framing of risk, including the approach taken to identify risk (top-down or bottom-up) and treatment of uncertain parameters, were found to be fundamental characteristics that influenced the methodology selected to evaluate adaptation options. The small sample of case studies available suggests that long-term coastal adaptation in Australian is in its infancy and there is a timely opportunity to guide local government towards robust methodologies for developing long-term coastal adaptation plans