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Über dieses Buch

Both the 'First International Summer School on Multiple Criteria Decision Making Methods, Applications and Software' and the present volume of readings could only be realised with assistance and support from many sides. We would like to express our gratitude to all those who have contributed to making a success of the first of a hopefully long series of summer schools in this field and to all those who have contribut. ed to the present volume. First of all we are grateful for the financial means supplied by a long list of sponsors, the most important of which are mentioned on the copyright page. Next, we are grateful to the members of the organising committee, Anna Ostanello and Giovanni Zambruno. Since this is the first of what will become a series of summer schools, the chairman of the organising committee, Benedetto Matarazzo, will start this volume with a brief account of the school held in Acireale. The programme committee consisted of Jean Fichefet, Anna Ostanello, Bernard Roy, Jaap Spronk (chairman) and Stanley Zionts. Their valuable contribu­ tion is gratefully acknowledged, as is the contribution of all the lecturers at the school. Of course, a school is not only made by its teachers, but just as much by its students. The primary aim of a school is to teach and to stimulate the students.



Introduction: MCDM on Its Way to Maturity

1. Introduction: MCDM on Its Way to Maturity

Since its early development a few decades ago, MCDM has reached maturity but not in all respects. Many conferences are being held in east and west, in north and. south. Many proceedings and special issues of important journals have appeared. Scholars and teachers all over the world are involved in research and teaching programmes of different size. Monographs, textbooks and dissertations have appeared in respectable numbers. Undoubtedly many more will follow. Furthermore, MCDM has received a lot of attention from practitioners both in the private and the public sectors. MCDM is used in practice to support actual decision processes. Nevertheless, MCDM has not yet reached full maturity. A still too large part of research in this field concentrates on algorithms rather than problems and, if problems are discussed, it is quite often as an illustration of these algorithms. This does not mean that this type of research is not needed. It does mean, however, that more effort should be directed towards problem oriented approaches. Fortunately, more and more research work is problem oriented. More attention is being paid to problem characteristics and to the adaptation of tools to problems instead of the other way round.
G. Fandel, J. Spronk

Multiple Criteria Decision Methods and Support


2. Basic Concepts for Multicriteria Decision Support

By ‘Multicriteria Decision Support’, or more classically but more improperly by ‘Multicriteria Decision Making’, one refers usually to a set of methods enabling a user to aggregate several evaluative criteria in order to select one or several ‘actions’ (projects, solutions, elements of solutions to a problem, etc.). But these expressions refer also the activity of supporting decisions for a well-defined decision maker (individual, firm, public administration, ...).
E. Jacquet-Lagrèze

3. Multiattribute Utility Theory as a Basic Approach

A decision problem can often be formulated as a problem where a set A of potential actions (possible solutions, feasible decisions) is considered among which one must:
  • either choose a single action considered as ‘the best’,
  • or select a subset of actions considered as ‘good’,
  • or order the actions from the best to the worst.
Ph. Vincke

4. Outranking Methods

In the perspective of decision aid, modelling activity (process) has substantially two roles: firstly in helping to comprehend, by mastering the various possible actions and by the reflections it gives to preexisting preferences, and secondly in contributing to the formation and evolution of the preferences of the decision maker(s) (DM) on stage so as to make acceptable or discover possibilities which were previously refused or not considered.
A. Ostanello

5. An Informal Introduction to Multicriteria Evaluation

Evaluation is a crucial component of effective organisation behaviour. Organisations plan actions to cope with or exploit anticipated future conditions. However, they typically cannot predict all relevant conditions and they must therefore continuously adapt their planning to varying circumstances. Evidently, planning processes are usually very ubiquitous and quite uncertain. On the other hand, impact patterns of decisions and actions are often intricate, far-reaching and conflicting. In the past, this has evoked the need for many kinds of evaluation approaches to assist the decision making process.
P. Nijkamp, H. Voogd

6. Multiple Criteria Mathematical Programming: an Overview and Several Approaches

Multiple Criteria Decision Making (MCDM) refers to making decisions in the presence of multiple, usually conflicting, objectives. Multiple criteria decision problems pervade all that we do and include such public policy tasks as determining a country’s policy, developing a national energy plan, as well as planning national defense expenditures, in addition to such private enterprise tasks as new product development, pricing decisions, and research project selection. For an individual, the purchase of an automobile or a home exemplifies a multiple criteria problem. Even such routine decisions as the choice of a lunch from a menu, or the assignment of job crews to jobs constitute multiple criteria problems. All have a common thread — multiple conflicting objectives.
S. Zionts

7. Mathematics of the Multiple Objective Programming Problem — a Tutorial

The constitutive conponents of a multiple objective decision model are:
a set X of potential or feasible alternatives,
K > 1 objective functions zk: X → ℝ with k = 1, ..., K,
K binary preference relations RK (k = 1, ..., K).
H. Isermann

8. Decision Concepts for Organisations

When, in the beginning of the fifties Simon (1952/53), for the first time, systematically tried to analyse decisions in organisations with a view to concluding from this the necessary quantitative solution instruments, it had rashly been expected that the formal foundations of an organisation theory with respect to business administration would be created very soon. In view of the developments which have taken place in the meantime in the fields of game and bargaining theory, and considering the knowledge obtained from the theory of multiple criteria decision making, it seems reasonable today to make another attempt to find out how far quantitative economic concepts of this kind can be used for or contribute to the formulating and solving of decision problems in organisations. Thus, cooperative games with or without side payments as well as non-cooperative games come into consideration. As to the application of the theory of bargaining to decision problems in organisations, two qualitatively different procedures have been developed, namely the approaches based on the game theory and the concessive models of bargaining formulated on the basis of spontaneous elements of behaviour.
G. Fandel

9. Theories of Risk and MCDM

Since the concept and the measures of risk are largely spread over different research fields, this paper does not pretend to be a survey of the treatment of risk through the MCDM literature for two reasons. First, we think that existing theories of risk suffer from a lack of generality because uncertainty and risk are too narrowly conceived. Second, maybe because of this lack of generality, few papers or books specifically deal with risk in MCDM and we think that the existing literature on MCDM under the conditions of risk is still in its infancy.
G. Colson

10. Data Structures and Complexity of Algorithms for Discrete MCDM Methods

It appears that microcomputers will play a more and more important part in the use of multiple criteria decision aid methods. It is thus interesting to evaluate the impact of the implementation design on response time. In this respect, one of the most valuable means is the concept which has been called ‘time complexity’ of algorithms. This time complexity is rather dependent on the data structures used to represent and to manipulate the objects involved in the algorithms.
J. Fichefet

11. Data Base Approach for Multicriteria Decision Support Systems (MCDSS)

Traditional intuitive methods of decision making are no longer adequate to deal with the complex problems faced by the modern decision maker. The difficulty in addressing these problems is complicated by the interrelations, immediacy and far-reaching implications of actions taken (Donovan 1976). Decision support systems have been developed to provide the information and analysis necessary for the decisions. Personal computers, computer networks, data bases, colour graphics and computer-based models are among the technological developments which are stimulating interest in the use of computers to support decision making (Sprague and Carlson 1982). The characteristics of the problems associated with decision support are different from those to which data base systems and other computational technologies have normally been applied in the past.
M. T. Jelassi, M. Jarke, A. Checroun

12. Design of Computer Support for Multicriteria and Multiperson Decisions in Regional Water Resources Planning

Decision making for design of regional water resources systems shows a high complexity, due to many interrelations between aspects, decision makers and planning procedures. Aspects are of a technical, a psychological, an ergonomical (human-computer interaction) and an organisational nature. Decision makers are policy makers, planners and designers.
H. Schaeffers



13. Financial Planning with Conflicting Objectives

In this paper [1] we will demonstrate that financial planning in the private firm should be considered as a multiple criteria decision problem, the solution of which can be brought closer by employing multiple criteria decision methods.
J. Spronk

14. Interactive Multiple Goal Programming for Bank Portfolio Selection

In this paper, we describe and illustrate a new tool for the management of bank portfolios. This new tool, Interactive Multiple Goal Programming (IMGP), is certainly not intended to replace management by prescribing how ‘the’ optimal bank portfolio can be found. Instead, IMGP is a systematic procedure for gaining insight into the role of the various conflicts, uncertainties and other complexities inherent in bank portfolio management. On the basis of these new insights and assisted by the procedure, management is able to find new solutions and to get a better idea of the implications of these solutions for the bank’s position.
J. Spronk, G. Zambruno

15. MCDM Problems in Rabobank Nederland

In The Netherlands there are nearly 1000 Rabo Banks each operating in its own geographical region completely independent of the others. All these Rabo Banks together have founded a cooperation that takes care of that part of banking business that can be handled more efficiently by a central (and larger) organisation, such as foreign affairs, high risk investments, money market transactions and automation. As a consequence of this organisational scheme, the central organisation, called Rabobank Nederland, should be considered as a daughter of 1000 mothers, which is essentially different from the rather common construction in which the central organisation is the mother of a number of daughters. Thus, Rabobank Nederland is limited in its possibilities to manage and direct the consolidated corporation.
J. Telgen

16. On the Applicability of Game-Theoretic and Bargaining Methods to a Wage Bargaining Problem

Wage bargaining may formally be treated as decision problems among two parties with different utility functions. The decision consists of determining the increase of the wage rate for the time of the tariff contract commonly accepted by the both tariff parties representing the employers and the employees respectively. So far, on principle, the same solution methods of the game and the bargaining theory can be applied to such decision situations as they come into question for multi-person decision problems in organisations (Fandel 1979, Fandel 1981). However, because of the special problem structure in the case of wage bargaining one may restrict mainly to cooperative solution concepts without side payments.
G. Fandel

17. Computer Selection and Multicriteria Decision Aid

We have shown elsewhere that computer selection involves many multicriteria problems and we have proposed a methodology taking this fact into account (Fichefet 1981). Hereafter, we shall confine to the final phase of such a methodology, when the decision maker is faced with a set A — named here the set of feasible actions — of narrowly defined computer configurations (e.g. a DEC 20/50 with three magnetic tape drives and two removable disk units) and has to select the most appropriate alternative in order to process a given (present and expected) workload as inexpensively as possible.
J. Fichefet

18. A Methodology for Multiple Criteria Environmental Plan Evaluation

In the past decade, multicriteria analysis has become an increasingly important analytical instrument in environmental evaluation problems. It offered many advantages over conventional tools, as it provided a framework for integrating non-monetary and even qualitative effects in plan and project evaluation. ‘Soft’ aspects of complex decision problems could be taken into account without reducing them to inferior criteria.
R. Janssen, P. Nijkamp, H. Voogd

19. An Example of Comparison of Two Decision-Aid Models

Let us consider a situation where a decision is necessary and where several criteria are involved. The analyst who has to help an actor in such a decision process by using as rigorous a method as possible, generally has the choice between several approaches, which involve several ways of viewing the real world and can lead to significantly different models. The objective of the present study is to compare two of these models that are frequently used, and thus to shed light on two different currents of thought that have been developing on either side of the Atlantic.
B. Roy, D. Bouyssou

20. Multiple Criteria Analysis in Energy Planning and Policy Assessment

The explosive growth in the market price of energy (especially of oil) over the last decade or so has made the question of future energy supplies a major political issue in almost all countries of the world. Decisions concerning energy supply can have far-reaching consequences influencing, among other things, the quality of the environment, the state of the economy (balance of trade deficit, unemployment), the level of dependence on foreign energy sources, the standard of living of the population and the national distribution of costs and benefits. All of these factors should be considered in energy planning and policy assessment — the main objectives of this process are discussed in Section 2.
M. Grauer


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