Multi-criteria Evaluation Problem Research Articles

Assessing the performance of banks through an improved sigma-mu multicriteria analysis approach

The σ-μ efficiency methodology has been recently introduced for multicriteria evaluation problems, based on the framework of Stochastic Multi-Attribute Acceptability analysis (SMAA), to address the uncertainty in the performance of a set of decision alternatives. The methodology builds, iteratively, a set of Pareto-Koopmans efficiency frontiers, which are used to assess the alternatives with respect to their expected performance and its variability, measured across different scenarios for the weights of the evaluation criteria. This paper presents an improved algorithmic implementation of this methodology that provides results that are consistent with the Pareto dominance relation between the alternatives. The proposed approach is employed to evaluate the performance of a sample of European banks which participated in the European stress tests conducted by the European Banking Authority, over the last five years available (2017–2021). The performance and efficiency of the banks is analyzed using financial criteria along with environmental, social, and governance (ESG) factors. Results from comprehensive and disaggregated analysis reveal performance disparities among banks in financial and ESG factors, highlighting the influence of country-specific green policies and individual bank practices. Valuable for the banking sector and regulators, the findings help identify operational inefficiencies and propose areas for performance enhancement, operational improvement, and innovation, with a focus on green practices.

The precedence function: a numerical evaluation method for multicriteria ranking problems

This paper proposes and characterizes a method to solve multicriteria evaluation problems when individual judgements are categorical and may fail to satisfy both transitivity and completeness. The evaluation function consists of a weighted sum of the average number of times that each alternative precedes some other, in all pairwise comparisons. It provides, therefore, a quantitative assessment which is well-grounded, immediate to compute, and easy to understand.

Evolving a comprehensive geomatics multi-criteria evaluation index model for optimal pipeline route selection

Selection of pipeline routes is a geospatial multi-criteria evaluation problem since it involves the assessment of technical, environmental and safety-related factors that influence pipeline system operations. This study determines the optimal pipeline route for transmission of oil and gas products using the Dangote Refinery Project in Nigeria as a case study. Pertinent route selection factors were identified and structured into the expert feedback model of the Analytical Network Process (ANP) for accurate prioritization. LANDSAT 8 imageries of the study area were processed and classified into various land use and land cover types, which were further modelled in ArcMap 10.2 GIS software for routing analysis. Findings reveal that the most highly prioritized factors for proper route selection were the environmental and geological factors, while the least prioritized was the economic factor. In the end, alternative Route 2 was identified as the optimal route among the four evaluated alternative routes because of its minimum route length, minimum passage length through sensitive settlement areas, and less number of river, stream and existing platforms’ crossings.

A novel approach for enhancing green supply chain management using converged interval-valued triangular fuzzy numbers-grey relation analysis

The existing literatures are lacking on the cost and benefit concerns, screening the measures and convergence of interval-valued triangular fuzzy numbers-grey relation analysis (IVTFN-GRA) weight together. Nonetheless, Green supply chain management is always suffering the linguistic preferences and system incomplete information in evaluation process to enhance the performance. Yet, those previous studies are merely based on un-converged weight results. Hence, this study proposed a hybrid method to dealing with this multi-criteria evaluation problem. Fuzzy Delphi method proposes to screen the evaluation criteria and converged IVTFN-GRA weight method handles the vagueness system uncertainty and incomplete information with interdependence relations. Hence, the proposed hybrid method enhanced the green supply chain management and compared multi-methods to enhance their performance in Taiwanese electronic focal firm. The result showed that the converged weight is consistent with the real practices, despite the differences with the current average weighting method. The finding in the long-term perspective: resilience and operational improvement are the top weighted aspects.

Desalination technology selection using multi-criteria evaluation: TOPSIS and PROMETHEE-2

In this paper, the need of multi-criteria evaluation (MCE) for a desalination technology selection is emphasized through a case study. Decision context, problem formulation and the relative importance of 11 complete, operational and non-redundant criteria were established which represented the behavior of the MCE problem. TOPSIS and PROMETHEE-2 methods were identified as the appropriate MCE techniques and the five alternatives were evaluated using these methods separately. The respective results indicated that ED was the most applicable technology for the selected community and ranked the usage of electrodialysis, reverse osmosis, vapor compression, multiple effect distillation and multi-stage flash in the decreasing order of priority.

Similarity Measure between Vague Sets Based on Products

A new method for measure similarity between vague sets is proposed in this paper. Multi-criteria evaluation problems are used in decision-making constantly. Vague sets model is used to describe multi-criteria evaluation problems in this paper. And the similarity measure method based on products is used in sorting alternatives. The proposed method can solve the multi-criteria evaluation problems in a reasonable and objective way.

Regional Economic and Social Harmonious Degree Evaluation Model Using Intuitionistic Fuzzy Set

The harmonious degree is an essential factor evaluating the coordinative development of economy and society. It’s a typical multi-criteria evaluation problem to access the degree. For the vagueness and uncertainty of assessing information, an evaluation model using intuitionistic fuzzy set is proposed in this paper to assess regional economic and social harmonious degree objectively. In the model, the initial weight is set by intuitionistic fuzzy entropy, the correction weight is set according to the common people’s preference of subjective emotion, Thus the combination weight is get by merging the above two weights. And the assessing score is calculated by weighted aggregation operator integrating the assessing information. Finally, an example assessing the harmonious degree of five cities in Pearl River Delta of China shows the effectiveness of the model.

A multi-actor multi-criteria analysis of the performance of global cities

The strong world-wide urbanisation trend calls for a repositioning of cities, especially the large cities with a global impact. These cities tend to become economic, logistic and political powerhouses and are increasingly involved in a competition on their integral performance. The present paper aims to trace to what extent and why some cities outperform others. Starting from an extensive database on many important characteristics of global cities, this paper offers a multi-criteria methodology for identifying the relative position of various important cities on the basis of distinct assessment criteria. The explicit consideration of the perceptions of important classes of stakeholders on the performance outcomes of the various cities involved allows for an enhanced policy analysis. From a technical assessment perspective, the applied part of the paper employs the MAMCA and PROMETHEE multi-criteria methodology, which have proven their analytical power in various multi-criteria evaluation problems over the past years. The paper concludes with some policy perspectives and lessons.

Developing a user-friendly decision support system for the wetlands corridor of the Gulf of California

In this paper we describe the development of the software TreeDSS, a user-friendly decision support system, developed as a central component of the project “The wetlands corridor of the Gulf of California (WCGC)”. It aims to provide a support tool to partners of the project for structuring and solving frequent multicriteria evaluation problems, such as suitability and vulnerability assessment, resource allocation and zoning. TreeDSS basically allows users to build decision trees by coding expert knowledge using a friendly graphical interface and couples automatically with the geographic information software ArcMap 9.3 to present results both, as tables and maps, making it possible for evaluators reviewing criteria, ranges and decisions reached in real time. To illustrate how the software can be used in a real management situation, we present, as case study the development of a suitability assessment model to identify potential feeding grounds for migratory birds along the WCGC.

Estimation of Group Priorities and Value of Information

In this paper, we present a Bayesian approach to model uncertainty about a group's priorities in a multicriteria evaluation problem and develop a methodology to quantify amount of information provided by a sample of priorities. In so doing, we discuss how the quantification of the information content can be used to decide to elicit additional priorities from the group. We illustrate the implementation of our approach and discuss additional insights that it provides using real-life data from an academic department's priority analysis. Copyright © 2013 John Wiley & Sons, Ltd.

Business multicriteria performance analysis: a tutorial

PurposeThe business performances of firms are measured on a set of indicators (Financial Ratio Analysis Indicators or Balanced Scorecard Key Performance Indicators). Traditional benchmark analysis considers a set of criteria, though it generally synthesizes all the results, taking into consideration only an aggregate performance criterion (reductio ad unum approach). This methodology has many disadvantages, both theoretical and empirical. The purpose of this paper is to illustrate the advantages, in terms of greater flexibility and realism, related to the application of a multicriteria methodology.Design/methodology/approachThe paper uses a tutorial approach. An exemplification of an outranking multicriteria methodology (ELECTRE type) is described.FindingsThe main findings of the paper can be summarized as: first, the evaluation of a business performance cannot generally be conducted by means of a unique criterion as in the traditional monocriterion benchmark analysis; second, when the evaluation of a firm is based on different genuine criteria, the performance has to be “satisfacing” and not maximizing; and third, the outranking methods are able to provide logically rigorous solutions to the genuine multicriteria benchmarking evaluation problems.Practical implicationsThe paper provides practical implications useful for evaluating firm performances in many cases, also when each stakeholder (managers, shareholders, banks, etc.) assigns different “weights” to the decision criteria.Originality/valueAs a multicriteria evaluation is generally incompatible with a profit maximizing approach, the paper proposes a multicriteria performance measure approach that offers Simon's satisfacing solutions. The paper shows that satisfacing solutions to a multicriteria evaluation problem may be rigorously obtained through an outranking methodology (already introduced by other scholars).

Foreword: special issue on games and decisions in risk and reliability analysis

The objective of this special issue of Applied Stochastic Models in Business and Industry is to introduce a new theme, the use of game theory and decision theory in reliability and risk analysis. In so doing, the special issue brings together novel research from disciplines that have a lot to contribute to this theme, including economics, engineering, finance, medical sciences, probability, and statistics. The issue contains six papers. Four of these papers were presented at the First Symposium on Games and Decisions in Reliability and Risk which was held at The George Washington University on May 27–28, 2009. The discussion paper by David Banks, Francesca Petralia, and Shouqiang Wang introduces adversarial risk analysis as an alternative solution approach to game theory problems. The approach is implemented to gambling problems based on Borel games. The paper is discussed by Joseph B. Kadane and Nicholas G. Polson. The paper by Ethem Çanakoglu and S üleyman Özekici considers optimal portfolio selection, where distributions of asset returns change according to a latent Markovian process. A dynamic programming approach is developed to obtain a characterization of the optimal portfolio policy under the resulting hidden Markov model. Nader Ebrahimi, Ehsan S. Soofi, and Shaoqiong Zhao present properties of information measures for the Dirichlet family and related distributions. A new information characterization of the Dirichlet distribution in terms of survival and hazard gradient constraints is introduced. The paper by Rabin E. J. Neslo and Roger M. Cooke introduces probabilistic inversion methods to characterize a population of stakeholders' preferences via a probability distribution of utilities. The method is suitable for multicriteria evaluation problems, where utilities are inferred using data from discrete choices. The methodology is applied for the evaluation of actual health states data. Nicholas G. Polson and Morten Sorensen develop a simulation-based approach to stochastic dynamic programming problems. The presented approach is an alternative to the Q-learning algorithm of Watkins and Dayan (1992, Machine Learning, 8:279–292). The approach is illustrated using a dynamic investment problem. Nozer D. Singpurwalla gives an expository perspective on mathematical issues associated with the failure rate. More specifically, the circumstances, where the exponentiation formula overestimates the probability of survival, are discussed. The point is illustrated using Volterra's product integrals.

Computer-supported evaluation for seismic performance of existing buildings

A seismic performance evaluation is one of the highly complicated multi-criteria evaluation problems. This study presents a hierarchy of performance criteria that consists of performance categories such as strength, stiffness, configuration, and age of structures at a higher level while their subcategories considering the capacity of subsystems and components at lower levels mainly focus on the stage of preliminary evaluation. Two methods for determination of performance index are proposed; a simple composition method and a fuzzy inference method. Both methods use weighting factors to represent relative importance of multi-criteria in the determination of performance index. The simple composition method that operates on definite index values and assumes independence between performance criteria is easy to use but difficult to address the cases where complicity and uncertainty are of important problems. The fuzzy inference system uses fuzzy concepts where uncertainties are inherently unavoidable due to insufficient information and engineering assumption and exploits fuzzy rules in the multi-criteria evaluation by replicating heuristic knowledge and experience in logic-based descriptive rules. Moreover, the single performance index obtained by defuzzification enables us to draw a representative and comprehensive seismic performance index from a set of individual performance indexes at multi-levels.