Multi Criteria Decision Making

Abstract

‘Decision Making is the act of choosing between two or more courses of action’. However, it must always be remembered that there may not always be a ‘correct’ decision among the available choices. There may have been a better choice that had not been considered, or the right information may not have been available at the time. Multiple-criteria evaluation problems consist of a finite number of alternatives, explicitly known in the beginning of the solution process. In Multiple-criteria design problems (multiple objective mathematical programming problems) the alternatives are not explicitly known. An alternative (solution) can be found by solving a mathematical model. The number of alternatives is either infinite or not countable (when some variables are continuous) or typically very large if countable (when all variables are discrete). But both kind of problems are considered as a subclasses of Multi Criteria Decision Making problems. The MCDM problems can also be divided into two major classes with respect to the way the weights of the alternatives are determined: Compensatory and Outranking Decision Making. The example of the former is Analytical hierarchy Process (AHP) and the latter is ELimination and Choice Expressing Reality (ELECTRE). The basic working principle of any MCDM method is same: Selection of Criteria, Selection of Alternatives, Selection of Aggregation Methods and ultimately Selection of Alternatives based on weights or outranking.