A Markov Chain Approach to Multicriteria Decision Analysis with an Application to Offshore Decommissioning

Fernanda F. Moraes, Virgílio José M. Ferreira Filho, Carlos Eduardo Durange de C. Infante, Luan Santos and Edilson F. Arruda ()
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Fernanda F. Moraes: Alberto Luiz Coimbra Institute for Graduate School and Research in Engineering, Federal University of Rio de Janeiro, Rio de Janeiro 21941-598, Brazil
Virgílio José M. Ferreira Filho: Alberto Luiz Coimbra Institute for Graduate School and Research in Engineering, Federal University of Rio de Janeiro, Rio de Janeiro 21941-598, Brazil
Carlos Eduardo Durange de C. Infante: Alberto Luiz Coimbra Institute for Graduate School and Research in Engineering, Federal University of Rio de Janeiro, Rio de Janeiro 21941-598, Brazil
Luan Santos: Alberto Luiz Coimbra Institute for Graduate School and Research in Engineering, Federal University of Rio de Janeiro, Rio de Janeiro 21941-598, Brazil
Edilson F. Arruda: Alberto Luiz Coimbra Institute for Graduate School and Research in Engineering, Federal University of Rio de Janeiro, Rio de Janeiro 21941-598, Brazil

Sustainability, 2022, vol. 14, issue 19, 1-15

Abstract: This paper proposes a novel approach that makes use of continuous-time Markov chains and regret functions to find an appropriate compromise in the context of multicriteria decision analysis (MCDA). This method was an innovation in the relationship between uncertainty and decision parameters, and it allows for a much more robust sensitivity analysis. The proposed approach avoids the drawbacks of arbitrary user-defined and method-specific parameters by defining transition rates that depend only upon the performances of the alternatives. This results in a flexible and easy-to-use tool that is completely transparent, reproducible, and easy to interpret. Furthermore, because it is based on Markov chains, the model allows for a seamless and innovative treatment of uncertainty. We apply the approach to an oil and gas decommissioning problem, which seeks a responsible manner in which to dismantle and deactivate production facilities. The experiments, which make use of published data on the decommissioning of the field of Brent, account for 12 criteria and illustrate the application of the proposed approach.

Keywords: multicriteria analysis; Markov chains; decommissioning (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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