Multi-Criteria Project Portfolio Selection

Abstract

A very common problem in businesses consists in the planning and allocation of a limited set of resources among a set of candidate projects in order to fund them and carry them out within a given time horizon. Several issues must be taken into account during this decision process: multiple and conflicting objectives, different types of constraints, the planning horizon, and the interdependences between some projects (synergies, precedence, complementarity, incompatibility, etc.).This chapter provides an in-depth analysis of the main contributions that different authors have made in this field under a multi-criteria approach. The study describes the evolution in the treatment of the key aspects that define the problem of project portfolio selection and shows the advantages and disadvantages of the different approaches. Finally, taking into account all the previously mentioned aspects, a global and very flexible mathematical model is presented that will help decision makers to decide how to invest their scarce resources among a set of candidate projects, that is, how to choose a project portfolio.