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Multicriteria Portfolio Decision Analysis for Project Selection

  • Chapter
Multiple Criteria Decision Analysis

Part of the book series: International Series in Operations Research & Management Science ((ISOR,volume 233))

Abstract

Multicriteria Portfolio Analysis spans several methods which typically build on MCDA to guide the selection of a subset (i.e., portfolio) of available objects, with the aim of maximising the performance of the resulting portfolio with regard to multiple criteria, subject to the requirement that the resources consumed by the portfolio does not exceed the availability of resources and, moreover, satisfies other relevant constraints as well. In this chapter, we present a formal model of this selection problem and describe how this model can present both challenges (e.g. portfolio value may, due to the interactions of elements, depend on project-level decisions in complex and non-additive ways) and opportunities (e.g. triage rules can be used to focus elicitation on projects which are critical for value assessment). We also survey the application of Portfolio Decision Analysis in several domains, such as allocation of R&D expenditure, military procurement, prioritisation of healthcare projects, and environment and energy planning, and conclude by outlining possible future research directions.

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Acknowledgements

Thanks to Eeva Vilkkumaa and Juuso Liesiö for their help in generating Figs. 28.1 and 28.2.

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Authors and Affiliations

  1. Department of Management Science, University of Strathclyde, Scotland, UK

    Alec Morton

  2. College of Management, University of Massachusetts, Boston, Massachusetts, USA

    Jeffrey M. Keisler

  3. Systems Analysis Laboratory, Aalto University, Helsinki, Finland

    Ahti Salo

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  1. Department of Economics and Business; Portsmouth Business School, Operations & Systems Management, University of Catania; University of Portsmouth, Catania; Portsmouth, Italy

    Salvatore Greco

  2. Department of Management Science, Lancaster University, Lancaster, United Kingdom

    Matthias Ehrgott

  3. Universidade de Lisboa, CEG-IST, Instituto Superior Técnico, Lisboa, Portugal

    José Rui Figueira

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Morton, A., Keisler, J.M., Salo, A. (2016). Multicriteria Portfolio Decision Analysis for Project Selection. In: Greco, S., Ehrgott, M., Figueira, J. (eds) Multiple Criteria Decision Analysis. International Series in Operations Research & Management Science, vol 233. Springer, New York, NY. https://doi.org/10.1007/978-1-4939-3094-4_28

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