Methodology of multi-criteria decision making accounting for uncertainty and some applications

Vladimir I. Kalika, Galina Rossinsky

International Journal of Management and Decision Making, 2003, vol. 4, issue 2/3, 240-271

Abstract: A new methodology is proposed to select a predetermined number of "reasonable" alternatives from their considerable (maybe vast) initial set according to an arbitrary number of optimisation criteria and accounting for uncertainty factors, inherent in such real problems. The proposed intuitive methodology is based on accounting for uncertainty factors by performing multi-variant computations (MVC) and finding their "stable-optimal" solutions. The MVC process is realised as the multi-level hierarchical system of MVC series where each level includes a totality of scenarios having the same specific nature for this level. These scenarios reflect varying the problem conditions and parameters, including using Monte Carlo simulations. The methodology may be applied for various real problems in the fields of economics (first of all, planning), environmental and financial management, etc. The "bottlenecks" of these applications and some such general problems with the appropriate samples are considered.

Keywords: multi-criteria decision making; uncertainty factors; multi-level hierarchical system; Monte Carlo simulations; scenarios; stable-optimal solutions; reasonable alternatives; economic, environmental, social and other criteria; medium/long-term planning; decision makers' estimations. (search for similar items in EconPapers)
Date: 2003
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