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Making decisions with multiple criteria: a case in energy sustainability planning

  • Original Article
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EURO Journal on Decision Processes

Abstract

Decision-making problems in both the public and private sectors are involving an increasingly wide range of criteria which are also often in conflict with one another. This is particularly true for the case of decisions involving sustainability, which typically require standard financial or operational criteria, such as cost or production targets, to be balanced with other criteria that have social, ethical and environmental aspects in the decision-making model. In this paper, we consider a sustainable energy investment prioritization problem for a private entity with a diverse set of decision-making priorities, and use a multi-attribute utility theory (MAUT)-based approach to develop a ranking of the alternatives. As part of our case study, we focus on four issues that were the primary hurdles to implementation: (1) establishment of a goals hierarchy that captured a wide range of sustainability objectives in a structure that made sense for the decision makers, (2) use of probabilistic ordinal data for qualitative attributes, (3) specification of preference functions for qualitative attributes, and (4) determination of the applicability of the various methods of assessing the relative importance of the different qualitative and quantitative sustainability criteria. In turn, we discuss the resolution of each of these issues, along with sensitivity analyses that demonstrate that the resulting ranking of decision alternatives was reasonably robust. We conclude by discussing the implications of this study for the application of MAUT to other problems of this type.

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Notes

  1. More information about the Pepperdine University Center for Sustainability, including its history, mission and current activities, can be found at: http://www.pepperdine.edu/sustainability/.

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Authors and Affiliations

  1. McCombs School of Business, The University of Texas at Austin, Austin, USA

    Warren J. Hahn

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  1. Warren J. Hahn
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Correspondence to Warren J. Hahn.

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Hahn, W.J. Making decisions with multiple criteria: a case in energy sustainability planning. EURO J Decis Process 3, 161–185 (2015). https://doi.org/10.1007/s40070-014-0025-x

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  • DOI: https://doi.org/10.1007/s40070-014-0025-x

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