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Lect 2 - Multi-Criteria Decision Making

The document discusses the complexity of multi-criteria decision making (MCDM) and provides various examples of problems that involve multiple objectives, such as selecting a major or locating a nuclear power plant. It outlines approaches for MCDM, including the Weighted Score Method, TOPSIS, and Analytic Hierarchy Process. The document also details the steps involved in the Weighted Score Method, including determining criteria, assigning weights, and calculating scores for options.

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amanvocational
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3 views

Lect 2 - Multi-Criteria Decision Making

The document discusses the complexity of multi-criteria decision making (MCDM) and provides various examples of problems that involve multiple objectives, such as selecting a major or locating a nuclear power plant. It outlines approaches for MCDM, including the Weighted Score Method, TOPSIS, and Analytic Hierarchy Process. The document also details the steps involved in the Weighted Score Method, including determining criteria, assigning weights, and calculating scores for options.

Uploaded by

amanvocational
Copyright
© © All Rights Reserved
Available Formats
Download as PDF, TXT or read online on Scribd
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Dr.

Basma Ezzat
Introduction

Zeleny (1982) opens his book “Multiple Criteria Decision


Making” with a statement:

“It has become more and more difficult to see the world
around us in a unidimensional way and to use only a
single criterion when judging what we see”

2
Examples of Multi-Criteria
Problems
➢Many public sector problems and even private decision involve
multiple objectives and goals. As an example:
❑Locating a nuclear power plant involves objectives such as:
❖Safety
❖Health
❖Environment
❖Cost

3
Examples of Multi-Criteria
Problems
➢In a case study on the management of R&D research (Moore et.
al 1976), the following objectives have been identified:
❑ Profitability
❑ Growth and diversity of the product line
❑ Increased market share
❑ Maintained technical capability
❑ Firm reputation and image
❑ Research that anticipates competition

4
Examples of Multi-Criteria
Problems
➢In determining an electric route for power transmission in a
city, several objectives could be considered:
❑Health
❑Cost
❑ Reliability
❑ Importance of areas

5
Examples of Multi-Criteria
Problems
➢In selecting a major at KFUPM (King Fahd University of
Petroleum and Minerals), several objectives can be
considered. These objectives or criteria include:
❑ Job market upon graduation
❑ Job pay and opportunity to progress
❑ Interest in the major
❑ Likelihood of success in the major
❑ Future job image
❑ Parent wish

6
Examples of Multi-Criteria
Problems
➢Wife selection problem. This problem is a good example of
multi-criteria decision problem. Criteria include:
❑ Religion
❑ Beauty
❑ Wealth
❑ Family status
❑ Family relationship
❑ Education

7
Your best quote that reflects your
approach… “It’s Definitions
Basic one small step for
man, one giant leap for mankind.”
-➢
NeilFeasible
Armstrong Solution: is a vector 𝑥 ∈ 𝑋 satisfying all constraints.
➢ Feasible Region: is the collection of all such solutions.
➢ Optimal Solution: is a feasible solution where the objective
function reaches its maximum (or minimum) value – for
example, the most profit or the least cost, for a feasible point
𝑥ҧ such that:
✓ 𝑓 𝑥 ≤ 𝑓 𝑥ҧ → 𝑖𝑓 𝑚𝑎𝑥𝑖𝑚𝑢𝑚
✓ 𝑓 𝑥 ≥ 𝑓 𝑥ҧ → 𝑖𝑓 𝑚𝑖𝑛𝑖𝑚𝑢𝑚
Your best quote that reflects your
approach… “It’s Definitions
Basic one small step for
man, one giant leap for mankind.”
-➢
NeilConvexSet: is a set 𝑆 in 𝑅𝑛 is said to be convex, if line
Armstrong

segment joining any two points in the set is also inside the set.
𝜆𝑥1 + 1 − 𝜆 𝑥2 ∈ 𝑆, ∀ 𝜆 ∈ 0,1
Your best quote that reflects your
approach… “It’s Definitions
Basic one small step for
man, one giant leap for mankind.”
Function: let 𝑆 in 𝑅𝑛 , where 𝑆 is a non-empty
➢ Convex
- Neil Armstrong

convex set in 𝑅𝑛 . The function 𝑓 is said to be convex on 𝑆 if:


𝑓 𝜆𝑥1 + 1 − 𝜆 𝑥2 ≤ 𝜆 𝑓(𝑥1 ) + 1 − 𝜆 𝑓(𝑥2 ), 𝑥1 , 𝑥2 ∈ 𝑆, ∀ 𝜆 ∈ 0,1

➢ Concave Function: let 𝑆 in 𝑅𝑛 , where 𝑆 is a non-empty


concave set in 𝑅𝑛 . The function 𝑓 is said to be convex on 𝑆 if:
𝑓 𝜆𝑥1 + 1 − 𝜆 𝑥2 ≥ 𝜆 𝑓(𝑥1 ) + 1 − 𝜆 𝑓(𝑥2 ), 𝑥1 , 𝑥2 ∈ 𝑆, ∀ 𝜆 ∈ 0,1
Approaches for Multi-Criteria
Decision Making
➢Several approaches for MCDM exist. We will cover the
following:
❑ Weighted score method.
❑ TOPSIS (Technique of Order Preference by Similarity to Ideal Solution)
method
❑ Analytic Hierarchy Process (AHP)
❑ Goal programming

11
Weighted Score Method

➢ Determine the criteria for the problem


➢ Determine the weight for each criteria. The weight can be
obtained via survey, AHP, etc.
➢ Obtain the score of option i using each criteria j for all i and j
➢ Compute the sum of the weighted score for each option.

12
Weighted Score Method
➢In order for the sum to make sense all criteria scale must be
consistent, i.e.,
➢More is better or less is better for all criteria
➢Example:
❑In the wife selection problem, all criteria (Religion, Beauty, Wealth, Family
status, Family relationship, Education) more is better
❑If we consider other criteria (age, dowry) less is better

13
Weighted Score Method
➢ Let 𝑆𝑖𝑗 score of option 𝑖 using criterion 𝑗
➢ 𝑤𝑗 weight for criterion 𝑗
➢ 𝑆𝑖 score of option 𝑖 is given as:
𝑺𝒊 = σ𝒋 𝒘𝒋 𝑺𝒊𝒋

➢ The option with the best score is selected.

14
Weighted Score Method
➢ The method can be modified by using 𝑈(𝑆𝑖𝑗) and then calculating
the weighted utility score.
➢ To use utility the condition of separability must hold.
➢Explain the meaning of separability:
𝑈(𝑆𝑖) = 𝑤𝑗 𝑈(𝑆𝑖𝑗)
𝑈(𝑆𝑖)  𝑈( 𝑤𝑗 𝑆𝑖𝑗)

15
Example Using Weighted
Scoring Method
➢ Objective
❑Selecting a car

➢Criteria
❑Style, Reliability, Fuel-economy

➢ Alternatives
❑Civic Coupe, Saturn Coupe, Ford Escort, Mazda Miata

16
Example Using Weighted
Scoring Method
Weight 0.3 0.4 0.3
Style Reliability Fuel Eco.

Civic 7 9 9

Saturn 8 7 8

Ford 9 6 8

Mazda
6 7 8

17
Example Using Weighted
Scoring Method
Weight 0.3 0.4 0.3 𝑺𝒊
Style Reliability Fuel Eco.

Civic 7 9 9 8.4
Saturn 8 7 8 7.6
Ford 9 6 8 7.5
Mazda
6 7 8 7.0

18
Example Using Weighted
Scoring Method
Weight 0.3 0.4 0.3 𝑺𝒊
Style Reliability Fuel Eco.

Civic 7 9 9 8.4
Saturn 8 7 8 7.6
Ford 9 6 8 7.5
Mazda
6 7 8 7.0

19
Schwalbe: Sample
Weighted Scoring Model for
Project Selection

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