Decision making tools in Project management

Submitted by,

Abishek.N (1170100648)

INTRODUCTION:
Project Management has emerged as a discipline of high level decision making with the help of analogue and digital
tools which would help augment the intuition of a Project Manager and his team for taking decisions in favour of the
future of the project.

These decision making tools are general, they are based on common sense and are used in all the trades for backing
up the decisions taken by the decision making authorities.

Through decision making models we do not essentially plan for the risks, but we perform a reality check with what
should be the step which shall be taken in response to a particular situation. This situation may account for positive
or negative risks and for the risks we can deduce a risk response plan accordingly.

METHODS:
This study aims to present integrated multicriteria decision-making methods consisting of analytic hierarchy process
(AHP), technique for order preference by similarity to ideal solution (TOPSIS), elimination and choice translating
reality English (ELECTRE), grey relational analysis (GRA), and simple additive weighting (SAW) for determining the
best supplier in the healthcare sector and overcoming the gap in the literature. This study consists of five steps given
in Figure 1. In the first step, the literature was reviewed in order to determine the main criteria and subcriteria for
evaluating and selecting the best supplier in the healthcare sector. Then, the decision hierarchy was constructed and
a questionnaire was designed. In the second step, face-to-face interviews were performed with purchasing experts
to evaluate the suppliers. In the third step, the weights of criteria and the decision matrix were found using the AHP
method. In the fourth step, hybrid MCDM models (AHP-TOPSIS, AHP-ELECTRE, AHP-GRA, and AHP-SAW) were used
to select the best supplier. Finally, in the fifth step, the hybrid models were compared.The MCDM method is a
branch of a general class of Operations Research models. MCDM methods can easily and successfully solve the
evaluation and selection problems, which are complicated and have multiple contradictory objectives or criteria. In
many real-life decision-making problems, especially for supplier selection, MCDM methods are frequently used. The
recent trend is using the MCDM methods integrating two or more methods. In this study, AHP, TOPSIS, ELECTRE,
GRA, and SAW were used for supplier selection in a hospital. These methods are explained in the following section.

TOPSIS is an acronym that stands for 'Technique of Order Preference Similarity to the Ideal Solution' and is a
pretty straightforward MCDA method. As the name implies, the method is based on finding an ideal and an anti-ideal
solution and comparing the distance of each one of the alternatives to those.

It is a method of compensatory aggregation that compares a set of alternatives by identifying weights for each
criterion, normalising scores for each criterion and calculating the geometric distance between each alternative and
the ideal alternative, which is the best score in each criterion.
TOPSIS technique has been commonly used to solve decision-making problems. This technique is based on the
comparison between all the alternatives included in the problem. This proposed technique can be highly useful in
large scale decision-making problems as often found in aeronautic and automotive industries

In general, the process for the TOPSIS algorithm starts with forming the decision matrix representing the satisfaction
value of each criterion with each alternative. Next, the matrix is normalized with a desired normalizing scheme, and
the values are multiplied by the criteria weights.

AHPhas particular application in group decision

making and is used around the world in a wide variety
of decision situations in fields such as government,
business, industry, healthcare, shipbuildingand
education.

Rather than prescribing a "correct" decision, the AHP

helps decision makers find one that best suits their
goal and their understanding of the problem. It
provides a comprehensive and rational framework for
structuring a decision problem, for representing and
quantifying its elements, for relating those elements to
overall goals, and for evaluating alternative solutions.

Users of the AHP first decompose their decision problem into a hierarchy of more easily comprehended sub-
problems, each of which can be analysed independently. The elements of the hierarchy can relate to any aspect of
the decision problem—tangible or intangible, carefully measured or roughly estimated, well or poorly understood—

anything at all that applies to the decision at hand.

Once the hierarchy is built, the decision makers systematically evaluate its various elements by comparing them to
each other two at a time, with respect to their impact on an element above them in the hierarchy. In making the
comparisons, the decision makers can use concrete data about the elements, but they typically use their judgments
about the elements' relative meaning and importance. It is the essence of the AHP that human judgments, and not
just the underlying information, can be used in performing the evaluations.

The AHP converts these evaluations to numerical values that can be processed and compared over the entire range
of the problem. A numerical weight or priority is derived for each element of the hierarchy, allowing diverse and
often incommensurable elements to be compared to one another in a rational and consistent way. This capability
distinguishes the AHP from other decision making techniques.
In the final step of the process, numerical priorities are calculated for each of the decision alternatives. These
numbers represent the alternatives' relative ability to achieve the decision goal, so they allow a straightforward
consideration of the various courses of action.

Several firms supply computer software to assist in using the process. While it can be used by individuals working on
straightforward decisions, the Analytic Hierarchy Process (AHP) is most useful where teams of people are working on
complex problems, especially those with high stakes, involving human perceptions and judgments, whose
resolutions have long-term repercussions. It has unique advantages when important elements of the decision are
difficult to quantify or compare, or where communication among team members is impeded by their different
specializations, terminologies, or perspectives.

As can be seen in the material that follows, using the AHP involves the mathematical synthesis of numerous
judgments about the decision problem at hand. It is not uncommon for these judgments to number in the dozens or
even the hundreds. While the math can be done by hand or with a calculator, it is far more common to use one of
several computerized methods for entering and synthesizing the judgments. The simplest of these involve standard
spreadsheet software, while the most complex use custom software, often augmented by special devices for
acquiring the judgments of decision makers gathered in a meeting room.

Uses:

The procedure for using the AHP can be summarized as:

1. Model the problem as a hierarchy containing the decision goal, the alternatives for reaching it, and the
criteria for evaluating the alternatives.

2. Establish priorities among the elements of the hierarchy by making a series of judgments based on pairwise
comparisons of the elements. For example, when comparing potential purchases of commercial real estate,
the investors might say they prefer location over price and price over timing.

3. Synthesize these judgments to yield a set of overall priorities for the hierarchy. This would combine the
investors' judgments about location, price and timing for properties A, B, C, and D into overall priorities for
each property.

4. Check the consistency of the judgments.

5. Come to a final decision based on the results of this process.

Fuzzy Analytic HierarchyProcess Nevertheless, there is anextensive

literature which addresses the situation in the real world where the comparison ratiosare imprecise judgments. In
the conventional AHP, the pair wise comparisons for each level with respect to the goal of the best alternative
selection are conducted using a nine-point scale.

(1) The AHP method is mainly used in nearly crisp decision

(2) The AHP method creates and deals with a very unbalanced scale of judgment,

(3) The AHP method does not take into account the uncertainty associated with the mapping of one's
judgment to a number,

(4) Ranking of the AHP method is rather imprecise,

(5) The subjective judgment, selection and preference of decision-makers have great influence on the AHP
results. In addition, a decision-maker's requirements on evaluating alternatives always contain ambiguity and
multiplicity of meaning. Furthermore, it is also recognized that human assessment on qualitative attributes is
always subjective and thus imprecise. Therefore, conventional AHP seems inadequate to capture decision-
maker's requirements explicitly. In order to model this kind of uncertainty in human preference, fuzzy sets could
be incorporated with the pairwise comparison as an extension of AHP. The fuzzy AHP approach allows a more
accurate description of the decision making process. Zadeh came out with the fuzzy set theory to deal with
vagueness and uncertainty in decision making in order to enhance precision. Thus the vague data may be
represented using fuzzy numbers, which can be further subjected to mathematical operation in fuzzy domain.
Thus fuzzy numbers can be represented by its membership grade ranging between 0 and 1. A triangular fuzzy
number (TFN) Mt(r)

Analytic Network Process - ANP

The new paradigm of our times is that everything is interconnected to everything else and there is a flow of
influence among those things. The connections can be physical, political, mental, spiritual, and so on.

The Analytic Network Process (ANP) is now used to capture different aspects of tacit knowledge. Elements are
grouped into clusters of related factors rather than into hierarchical levels, and links are made from a parent factor
in a cluster to several elements, for example, the alternatives of the decision in another cluster. They may influence
the parent or be influenced by the parent with pairwise comparisons being made to establish their priorities.

A network is comprised of the clusters, elements and links. The ANP is a descriptive theory that combines these
measures to match what people actually do or guides them to do better than they were previously using only
qualitative thinking and hunches, and not limited to the top-down thinking of the hierarchic models. A simple
network can be extended to complex multi-level models of networks of benefits, opportunities, costs and risks.

ANP and fuzzy ANP

Since the 1970s when Saaty proposed the Analytic Hierarchy Process (AHP), its application has become prevalent in
the Multiple Criteria Decision-Making (MCDM) environment to address sophisticated decision-making problems.
ANP, a generalized form of AHP, can be applied as an efficient tool in the cases where the interactions among the
elements lead to the formation of a network structure being beneficial under different real-world conditions. ANP
approach is widely used for prioritization, performance evaluation, and other contexts, and it can detect feedback
and interdependent associations among and between the components.

Although ANP aims at capturing the expert’s knowledge, its traditional version failed to consider the human thinking
style, and, consequently, a fuzzy ANP (FANP) was proposed. The application of fuzzy theory in decision-making
problems has provided favorable practical results . Given that interval judgments is usually more convenient for the
decision-makers than the fixed-value judgments, the application of a fuzzy ANP is valid even in the cases of
unavailable information or costly dependable information. The difference between two ANP methods lies in
extracting the weights of the pairwise matrix; otherwise, they are the same. Several researchers have utilized a fuzzy
ANP-based method to solve complicated decision-making scenarios. Both of these methods have been applied in
healthcare settings
The PROMETHEE is an outranking method for ranking a finite set of alternative actions when multiple
criteria, which are often conflicting, and multiple decision-makers are involved [8]. PROMETHEE uses partial
aggregation and by a pairwise comparison of alternative actions, it allows to verify whether under specific conditions
one action outranks or not the others. The PROMETHEE methods are a family of outranking methods [19]:
PROMETHEE I (partial ranking); PROMETHEE II (complete ranking); PROMETHEE III (ranking based on intervals);
PROMETHEE IV (continuous case); PROMETHEE V (including segmentation constraints); and PROMETHEE VI
(evaluating the degree of hardness of a multicriteria decision problem with respect to the weights given to the
criteria, i.e., for human brain representation).

Best Worst Method (BWM) is a multi-criterion decision-making (MCDM) method which was proposed
byDr.JafarRezaei in 2015. The method is used to evaluate a set of alternatives with respect to a set of decision
criteria. The BWM is based on a systematic pairwise comparison of the decision criteria. That is, after identifying the
decision criteria by the decision-maker (DM), two criteria are selected by the DM: the best criterion and the worst
criterion. The best criterion is the one which has the most important role in making the decision, while the worst
criterion has the opposite role. The DM then gives his/her preferences of the best criterion over all the other criteria
and also his/her preferences of all the criteria over the worst criterion using a number from a predefined scale (e.g. 1
to 9). These two sets of pairwise comparisons are used as input for an optimization problem, the optimal results of
which are the weights of the criteria. The salient feature of the BWM is that it uses a structured way to generate the
pairwise comparisons which leads to reliable results.

Machine LearningUsing its unique Machine Learning / Artificial Intelligence Algorithms Easy Projects can
help project managers predict when a project is most likely to be completed.

Machine Learning Approach for Making Decision

Machine learning techniques can also help us improve decision making and even solve some of the above
limitations. For example, with Feature Engineering we can evaluate what criteria are important for decision.

In machine learning making decision can be viewed as assigning or predicting correct label (for example buy, not
buy) based on data for the item features. In the field of machine learning or AI this is known as classification
problem.Classification algorithms learn correct decisions from data. Below is the example of training data that we
input to machine learning classification algorithm. (Xij represent some numerical values)

Classification problem

Our options (decisions) are now represented by class label (most right column), criteria are represented by features.
So we now switched columns with rows. Using training data like above we train classifier and then use it to choose
the class (make decision) for new data.
There are different classification algorithms such as decision tree, SVM, Naive Bayes, neural network classification. In
this post we will look at classification with neural network.
We will use Keras neural network with 2 dense layers.

Per Keras documentation[5] Dense layer implements the operation:

output = activation(dot(input, kernel) + bias)
where activation is the element-wise activation function passed as the activation argument,
kernel is a weights matrix created by the layer,
and bias is a bias vector created by the layer (only applicable if use bias is True).

So we can see that the dense layer is performing similar math that we were doing in decision matrix.

Simple Additive Weighting (SAW) is one of the methods used to solve multi-
attribute decision problems. The usefulness of the basic concept of the SAW method is to find the number of
weighted performance ratings for each alternative on all attributes

SAW method. The SAW method is probably the simplest, best-known and most commonly used MCDM method.
In SAW, the overall score of a candidate solution is determined by the weighted sum of all attribute values