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

Taxonomical analysis of regional development by outranking relations on multiple principal components

This paper proposes a method of ranking the elements of a set of objects by multi-criteria analysis on multiple principal components derived from a multiple variable dataset pertaining to the objects. Concordance-discordance method of outranking and derivation of preference relations has been suggested as a technique of multi-criteria decision-making. The method has been illustrated by conducting the taxonomical analysis of regions according to their level of development.Taxonomical analysis; levels of regional development; principal components analysis; multi-criteria decision-making; concordance analysis; outranking relations; Bihar

Eigenvector Procedure based on Weighted Preference Flows in Multicriteria Outranking Analysis

The outranking analysis has been frequently used to deal with the complex decisions involving qualitative criteria and imprecise data. So far, various versions of ELECTRE have been proposed for ranking alternatives in the outranking analysis. Among others, ELECTRE III has been widely used. A distillation procedure using a qualification index is proposed to rank alternatives from the valued outranking relation. A weakness of ELECTRE III, however, is to involve the arbitrariness in the selection of the discrimination threshold function for the distillation procedure. On the other hand, various variants of PROMETHEE are also proposed for the outranking analysis. PROMETHEE intends to be simple and easy to understand. A deficiency of PROMETHEE is that it does not take into account the preference intensity of alternatives in the in-preference flow and out-preference flow for each alternative. We propose a new preference ranking procedure based on eigenvector using the gweightedh in- and outpreference flows of each alternative in the outranking analysis. The basic idea of the procedure proposed here is that it should be better to outrank a gstrongh alternative than a gweakh one and, conversely, it is less serious to be outranked by a gstrongh alternative than by gweakh one in a PROMETHEE context. It has a completely different interpretation with the AHP (Analytic Hierarchy Process) since the components of the valued outranking relation matrix are neither ratios nor reciprocal as in the AHP.Multiple criteria analysis; PROMETHEE; ELECTRE; Valued outranking relations

QFD: an interactive algorithm for the prioritization of product's technical characteristics

The paper is concerned with the problem of the ``prioritization' ' of technical design characteristic s of a product. An interactive algorithm has been developed with the aim to better support the engineering design process by means of quality function deployment (QFD). The algorithm tries to soften customer approach to QFD in those situations in which customers are not able to give a ``significant' ' evaluation of the relative importance of their requirements . The method allows determining a ranking order of design characteristic s without the artificia l conversion of symbols contained in the relationshi p matrix, and without the use of explici t information concerning the relative degree of importance of customer requirements. A simple numerical applicatio n is also provide

Preference aggregation with multiple criteria of ordinal significance

In this paper we address the problem of aggregating outranking situations in the presence of multiple preference criteria of ordinal significance. The concept of ordinal concordance of the global outranking relation is defined and an operational test for its presence is developed. Finally, we propose a new kind of robustness analysis for global outranking relations taking into account classical dominance, ordinal and classical majority oncordance in a same bipolar-valued logical framewor

A new view to uncertainty in Electre III method by introducing interval numbers

The Electre III is a widely accepted multi attribute decision making model, which takes into account the uncertainty and vagueness. Uncertainty concept in Electre III is introduced by indifference, preference and veto thresholds, but sometimes determining their accurate values can be very hard. In this paper we represent the values of performance matrix as interval numbers and we define the links between interval numbers and concordance matrix .Without changing the concept of concordance, in our propose concept, Electre III is usable in decision making problems with interval numbers

ELECTRE I Method Using Hesitant Linguistic Term Sets: An Application to Supplier Selection

Decision making is a common process in human activities. Every person or organization needs to make decisions besides dealing with uncertainty and vagueness associated with human cognition. The theory of fuzzy logic provides a mathematical base to model the uncertainities. Hesitant fuzzy linguistic term set (HFLTS) creates an appropriate method to deal with uncertainty in decision making. Managerial decision making generally implies that decision making process conducts multiple and conflicting criteria. Multi criteria decision analysis (MCDA) is a widely applied decision making method. Outranking methods are one type of MCDA methods which facilitate the decision making process through comparing binary relations in order to rank the alternatives. Elimination et Choix Traduisant la Réalité (ELECTRE), means elimination and choice that translates reality, is an outranking method. In this paper, an extended version of ELECTRE I method using HFLTS is proposed. Finally, a real case problem is provided to illustrate the HFLTS-ELECTRE I method

Choice Rules with Size Constraints for Multiple Criteria Decision Making

In outranking methods for Multiple Criteria Decision Making (MCDM), pair-wise comparisons of alternatives are often summarized through a fuzzy preference relation. In this paper, the binary preference relation is extended to pairs of subsets of alternatives in order to define on this basis a scoring function over subsets. A choice rule based on maximizing score under size constraint is studied, which turns to formulate as solving a sequence of classical location problems. For comparison with the kernel approach, the interior stability property of the selected subset is discussed and analyzed.Combinatorial optimization; Fuzzy preferences; Integer Programming; Location; Multiple Criteria Decision Aid

Choosing Cleaner and Safer Production Practices through a Multi-criteria Approach

International audienceThrough the international (Convention) and European (Industrial Emissions Directive) legislations, industries have to apply preventive measures according to the Best Available Technique (BAT) concept or cleaner production (CP) strategies. Many technical solutions exist to conform, but the major stake is to assess the overall effect or impact of the implementation of a technique on the installation. Several methods have been developed based on LCA or carbon balance methodologies, but they lack the technical, economical and social criteria, which are aspects that should be taken into account when choosing cleaner and safer production practices. This paper presents a decision-making tool based on a multi-criteria analysis approach, likely to encourage manufacturers to implement cleaner and safer production practices in the metal finishing sector. First, a systemic analysis of the industrial facility and its environment is used to identify 15 criteria structured in a hierarchical pattern. These criteria represent the targets which could potentially impacted by a cleaner and safer production practice: for example, water, soil, air, but also the environment of the workstation of an operator, the production processes, etc. Using these 15 criteria, users can then assess up to 86 practices selected in particular in the BREF report dealing with Metal Finishing. Thus, this tool enables the practices the most adapted to a particular company to be chosen not only on financial criteria, but also on a social, environmental and technical view