Abstract
This investigation compares two multi-criteria analysis methods, Analytic Hierarchy Process (AHP) and Dominance- based Rough Set Approach (DRSA), applied to the ranking of ten investment projects based on evaluation of the overall risk associated with each. AHP requires decision makers to evaluate the various elements of risk by paired comparison in terms of their impact on the element above them in the hierarchy. Each investment project is then rated in terms of each risk to produce a weighted summation used for ranking purposes. DRSA produces a ranking based on a set of decision rules that are derived from evaluation of a reduced number of reference projects well known to the decision makers. For this purpose, four reference projects were chosen from the ten. The results show that the two methods gave very similar final rankings of the ten projects. The advantage of DRSA is that the projects are evaluated using a reduced number of attributes without explicit knowledge of their impact in the hierarchy, thus eliminating a lengthy and tedious process for the decision makers.
Highlights
This study was carried out in the Abitibi-Témiscamingue region, located in the southwest portion of the province of Québec (Canada)
This investigation compares two multi-criteria analysis methods, Analytic Hierarchy Process (AHP) and Dominancebased Rough Set Approach (DRSA), applied to the ranking of ten investment projects based on evaluation of the overall risk associated with each
DRSA produces a ranking based on a set of decision rules that are derived from evaluation of a reduced number of reference projects well known to the decision makers
Summary
This study was carried out in the Abitibi-Témiscamingue region, located in the southwest portion of the province of Québec (Canada). Of the 5937 businesses in this region (the fourth largest in the province), 96% are small and medium-sized with less than 50 employees [1] Since such businesses have fewer opportunities for financing than larger businesses, which can issue shares, bonds or other securities, development agencies have a major role to play in providing support to them, especially for financing. Agencies such as the Community Futures Development Corporation (CFDC), the Business Development Bank of Canada (BDC), Regional Development Centres (CLD), Investment Quebec (IQ) are represented in this region. In order to protect the confidentiality of the participants in the present study, the names of the agencies involved are withheld
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