Modified TOPSIS Method With Banking Case Study

Abstract

In this chapter, an alternative measure to Euclidean distance measurement is proposed which is used to calculate positive and negative ideal solutions in the traditional TOPSIS method. Lp Minkowski family and L1 family distance measures were used for this purpose. By taking the averages of the distance measurements in the Lq and L1 families, more general and accurate level units were tried to be obtained. Thus, it was shown that TOPSIS method can give different results according to the distance measure used. The importance of the distance measurement unit was emphasized to rank the alternatives correctly. The implementation and evaluation of the proposed method was carried out through the financial performance of the deposit bank operating in the Turkish Banking Sector. It was seen that the rankings of the alternatives changed according to the distance measurements used. By referring to the distance measurements that can be used in the TOPSIS method, it was shown that the rank of the alternatives can vary according to the preferred distance measure.