Measurement issues in the evaluation of projects in a project portfolio

A common problem in multicriteria decision analysis is how to value projects in a project portfolio. Recently, there has been some attention given to a practice whereby analysts define a value function on some criterion by setting 0 as the value of the worst project. In particular, Clemen and Smith have argued this practice is not sound as it gives different results from the case where projects are "priced out", and makes a strong implicit assumption about the value of not doing a project. Moreover, it can be shown easily that the optimal choice set is not invariant with respect to rescalings such as those induced by the addition of a new item to the choice set, hence rank reversal can occur when this procedure is used. We provide a measurement theoretic account of the phenomenon and show that whether the admissible transformations of the underlying scale are similarity or affine (or other) transformations depends on the precise details of the value model used. We also provide an axiomatic impossibility result which illustrates an incompatibility between an idea that inaction has a value of zero and the admissibility of constant scale translations. We use our analysis to comment on the view of Clemen and Smith that the baseline problem is best dealt with by assigning project-specific scores for not doing particular projects

Updating, Upgrading, Refining, Calibration and Implementation of Trade-Off Analysis Methodology Developed for INDOT

As part of the ongoing evolution towards integrated highway asset management, the Indiana Department of Transportation (INDOT), through SPR studies in 2004 and 2010, sponsored research that developed an overall framework for asset management. This was intended to foster decision support for alternative investments across the program areas on the basis of a broad range of performance measures and against the background of the various alternative actions or spending amounts that could be applied to the several different asset types in the different program areas. The 2010 study also developed theoretical constructs for scaling and amalgamating the different performance measures, and for analyzing the different kinds of trade-offs. The research products from the present study include this technical report which shows how theoretical underpinnings of the methodology developed for INDOT in 2010 have been updated, upgraded, and refined. The report also includes a case study that shows how the trade-off analysis framework has been calibrated using available data. Supplemental to the report is Trade-IN Version 1.0, a set of flexible and easy-to-use spreadsheets that implement the tradeoff framework. With this framework and using data at the current time or in the future, INDOT’s asset managers are placed in a better position to quantify and comprehend the relationships between budget levels and system-wide performance, the relationships between different pairs of conflicting or non-conflicting performance measures under a given budget limit, and the consequences, in terms of system-wide performance, of funding shifts across the management systems or program areas

A MULTICRITERIA DECISION MODEL FOR SELECTING A PORTFOLIO OF OIL AND GAS EXPLORATION PROJECTS

ABSTRACT. As well as exploratory activity being at the heart of and guiding the future of the oil industry, it is fundamental that there be a comprehensive analysis covering the various factors and nuances that arise in the selection of exploration projects. Moreover, it is essential that a decision model enables the decisionmaker's preferences to be addressed in a structured (and methodologically correct) way, and one which is easy to understand and to apply in a real-world. Therefore, this paper proposes a multicriteria decision model which underpins using a deterministic procedure for selecting a portfolio of oil and gas exploration projects and thereafter a reality-based application is set out, based on a decision making context within Petrobras

Système d'aide à la décision multicritère orienté Web pour la répartition des ressources des universités publiques brésiliennes

L'objectif principal de cette étude est de proposer un système d'aide à la décision multicritères orienté Web pour l'allocation interne des ressources dans les universités publiques brésiliennes afin de démontrer comment l'utilisation d'une méthode de décision multi-attributs appropriée pourrait améliorer la distribution d'un budget limité en utilisant une fonction de valeur additive combiné avec un système pour décentraliser la réalisation des tâches, afin d’augmenter la productivité des membres du groupe et pour améliorer la gestion des données en utilisant le Web. Ainsi, une université fédérale brésilienne a été choisie comme étalon afin d’avoir une application numérique du modèle multicritère développé. La disponibilité des données et la similitude avec un modèle général au Brésil nous a influencés pour ce choix. L'université analysée dans cette recherche à 21 unités administratives sectorielles (UAS) qui sont divisées par domaines, tels que les sciences humaines, les sciences biologiques, l'ingénierie, la faculté de médecine, etc., et chacune d'entre elles a des besoins budgétaires annuels. L'objectif est que l'application d'un modèle correct pour répartir le budget local entre ces unités puisse contribuer à la stratégie permanente de l'Université en matière d'allocation efficace et équitable des ressources. L'idée est que le système multicritère pourrait soutenir les décideurs, les parties prenantes qui participent au processus de décision et décentraliser la réalisation des tâches, puisque les SIAD orientés Web offrent des outils de recherche intelligents qui pourraient leur permettre de trouver et de gérer l'information rapidement et à peu de frais. En outre, il est important de souligner que le modèle présenté ici pourrait être étendu et utilisé par d'autres universités fédérales au Brésil ou dans d'autres pays, en adaptant les alternatives et les critères pour chaque cas spécifique. La principale préoccupation est de démontrer l'utilisation d'un DSS Web multicritères pour ce problème particulier.The allocation of scarce resources is a complex problem, especially when it comes to budget constraints. Thus, this work aims to propose a multicriteria web-based Decision Support System for resource allocation in the context of higher education organizations, more precisely, public universities that have budget constraints, such as Brazilian federal universities. To do so, a Brazilian federal university was chosen as an end-user to make a numerical application to validate the multicriteria model for resource allocation proposed and, afterward, a web-based DSS was developed. For the MCDM resource allocation model, an additive value function was considered to set the percentage of the total budget that every alternative should receive. The problem was seen as a special case of project portfolio selection problem because its approach is deemed to be appropriate for a resource allocation decision context. For the web-based DSS, the analysis was carried out by developing a DSS Database model to store and retrieve data, defining the user’s interface based on his detailed requirement analysis and using a web platform to transform the prototype into a web-based system. The results were achieved. The system provided a clear vision on how the resource allocation procedure works, the entire process became more transparent to the ones that are affected by it, to the decision makers and to the government, enabling them to take safer and reliable decisions, seeking to reduce uncertainties and to maximize their results. The multicriteria web-based DSS presented here could be extended and applied by other federal universities in Brazil or other countries, adapting the alternatives and criteria for each specific internal allocation model and to the DM needs

04461 Abstracts Collection -- Practical Approaches to Multi-Objective Optimization

From 07.11.04 to 12.11.04, the Dagstuhl Seminar 04461 ``Practical Approaches to Multi-Objective Optimization\u27\u27 was held in the International Conference and Research Center (IBFI), Schloss Dagstuhl. During the seminar, several participants presented their current research, and ongoing work and open problems were discussed. Abstracts of the presentations given during the seminar as well as abstracts of seminar results and ideas are put together in this paper. The first section describes the seminar topics and goals in general. Links to extended abstracts or full papers are provided, if available

The rank reversal problem in multi-criteria decision making : a literature review

Despite the importance of multicriteria decision-making (MCDM) techniques for constructing effective decision models, there are many criticisms due to the occurrence of a problem called rank reversal. Nevertheless, there is a lack of a systematic literature review on this important subject which involves different methods. This study reviews the pertinent literature on rank reversal, based on 130 related articles published from 1980 to 2015 in international journals, which were gathered and analyzed according to the following perspectives: multicriteria technique, year and journal in which the papers were published, co-authorship network, rank reversal types, and research goal. Thus our survey provides recommendations for future research, besides useful information and knowledge regarding rank reversal in the MCDM field

EmC-ICDSST 2019: 5th International Conference on Decision Support System Technology - ICDSST 2019 & EURO Mini Conference 2019 on "Decision Support Systems: Main Developments & Future Trends"

info:eu-repo/semantics/publishedVersio

The Use of the AHP in Civil Engineering Projects

Most engineering, economic, social and institutional decisions are made with explicit notions of optimal behavior and implicit human motivations. In such a process, manipulation of both tangible and intangible data and satisfaction of multiple criteria are essential to the success of decision-making. In this paper an approach to multiple-criteria decision making known as the analytic hierarchy process (AHP) is presented. Some mathematical details of the procedure are briefly discussed. The application of the method to a real life civil engineering project for the selection of an appropriate bridge design is also presented.multi-criteria decision making, analytic hierarchy process, bridge design

The identification of acquisition targets in the EU banking industry: An application of multicriteria approaches

In this paper we develop classification models for the identification of acquisition targets in the EU banking industry, incorporating financial variables that are mostly unique to the banking industry and originate from the CAMEL approach. A sample of 168 non-acquired banks matched with 168 acquired banks is used over the period 1998-2002, covering 15 EU countries. We compare and evaluate the relative efficiency of three multicriteria approaches, namely MHDIS, PAIRCLAS, and UTADIS, with all models developed and tested using a 10-fold cross validation approach. We find that the importance of the variables differs across the models. However, on the basis of univariate test and the results of the models we could state that in general after adjusting for the country where banks operate, acquired banks are less well capitalized and less cost and profit efficient. The results show that the developed models can achieve higher classification accuracies than a naïve model based on random assignments. Nevertheless, there is fair amount of misclassification that is hard to avoid given the nature of the problem, showing that as in previous studies for non-financial firms, the identification of acquisitions targets in banking is a difficult task. © 2006 Elsevier Inc. All rights reserved