Comparison of Multi Criteria Decision Making Methods SAW and ARAS: An Application to Performance of Indian Pharmaceutical Companies

Dr A Vijayakumar

doi:10.22158/jetr.v1n2p23

Abstract

While assessing the performances of companies, the decision makers to take not only a single criterion for making the right decisions in to account, but also a number of other relevant criteria that could affect the performance. Because when it is necessary to make the best selection among several option, Multiple-Criteria Decision Making (MCDM) methods are used. This study is to provide insight in to the applicability of method Simple Additive Weightings Method (SAW) and Additive Ratio Assessment (ARAS) method under MCDM techniques to evaluate the performance of Indian Pharmaceutical companies during the study period 2006-2019. The seventeen evaluation criteria’s were used in the application. The constructed model was analysed using both SAW and ARAS method. The study results showed that the best performance belongs to Glico Smith Kline Pharma Limited in SAW method and Sun Pharmaceutical Industries Ltd in ARAS method and worst performance belongs to Ranbaxy Laboratories Limited in both methods. By comparison, both methods revealed the similar rankings of companies during the study period.

Highlights

The Indian industrial sector has undergone regulatory changes as the consequences of the economic reforms between 1988 and 1991
Results in order to perform objective conclusions in terms of the applicability of Simple Additive Weighting (SAW) and Additive Ratio Assessment (ARAS) methods, the influence which the weights of criteria, the used approaches and the applied normalization procedure have on the selection of the most appropriate alternative and obtained ranking orders of alternatives is taken in to consideration
This study presents the ranking results of selected Indian pharmaceutical companies based on objective criteria

Summary

Introduction

The Indian industrial sector has undergone regulatory changes as the consequences of the economic reforms between 1988 and 1991. India moved away from ’control’ era towards the “open” economy model. It should bring out a dramatic change in Indian Pharmaceutical companies. Firm’s performance is dependent on both financial and non-financial conditions of the firm. The problem of a decision maker is to evaluate a finite set of alternatives in order to find the best one, to rank them from the best to worst or to describe how well each alternative meets all the criteria simultaneously (Zavadskas & Turskis, 2010). The MCDM represents one of the fastest growing fields of operation research. It has over the time bound its application in solving various decision making problems

Methods

Results

Conclusion