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Multi-Criteria Decision Making: By: Mehrdad Ghafoori Saber Seyyed Ali
Multi-Criteria Decision Making: By: Mehrdad Ghafoori Saber Seyyed Ali
by:
Mehrdad ghafoori Saber seyyed ali
PRESENTATION CONTENT:
MCDM definition
Criteria specifications
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MCDM definitions
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MCDM consists of two related paradigms:
MADM: these problems are assumed to have a
predetermined , limited number of decision alternatives.
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MCDM problem has four elements:
Goal
Objectives
Criteria
Alternatives
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Examples of Multi-Criteria Problems
In determining an electric route for power
transmission in a city, several criteria could be
considered:
Cost
Health
Reliability
Importance of areas
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Examples of Multi-Criteria Problems
Locating a nuclear power plant involves criteria such
as:
Safety
Health
Environment
Cost
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Problem solving steps:
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Problemsolving steps:
4) For each of the criteria, assign scores to measure the
performance of the alternatives against each of these and
construct an evaluation matrix (often called an options
matrix or a decision table).
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Problem solving steps:
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Problem solving steps:
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Criteria characteristics
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Criteria characteristics
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Weighting the criteria:
Direct Determination
Rating, Point allocation, Categorization
Ranking
Swing
Trade-off
Ratio (Eigenvector prioritization)
Indirect Determination
Centrality
Regression – Conjoint analysis
Interactive
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Weighting the criteria:
-The ranking method: In this method, the criteria are simply ranked
in perceived order Of importance by decision- makers: c1 > c2 > c3 >
… > ci . The method assumes that the weights are non-negative and
sum to 1.
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Weighting the criteria:
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Standardizing the raw scores
Because usually the various criteria are measured in
different units, the scores in the evaluation matrix S
have to be transformed to a normalized scale. some
methods are :
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Problem solving techniques
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SAW (Simple Additive Weighting):
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SAW (Simple Additive Weighting):
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A simple example of using SAW method
Objective
Selecting a car
Criteria
Style, Reliability, Fuel-economy
Alternatives
Civic Coupe, Saturn Coupe, Ford Escort, Mazda
Miata
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Weights and Scores
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TOPSIS (Technique for Order Preference by Similarity to the Ideal Solution)
In this method two artificial alternatives are
hypothesized:
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Steps of TOPSIS
Step 2: Construct the weighted normalized decision
matrix.
Assume we have a set of weights for each criteria wj
for j = 1,…n.
Multiply each column of the normalized decision
matrix by its associated weight.
An element of the new matrix is:
vij = wj rij
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Steps of TOPSIS
Step 3: Determine the ideal and negative ideal
solutions.
Ideal solution.
A* = { v1* , …, vn*}, where
vj* ={ max (vij) if j J ; min (vij) if j J' }
i i
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Steps of TOPSIS
Step 4: Calculate the separation measures for each
alternative.
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Steps of TOPSIS
Step 5: Calculate the relative closeness to the ideal
solution Ci*
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An example of using TOPSIS method
Weight 0.1 0.4 0.3 0.2
Saturn 8 7 8 7
Ford 9 6 8 9
Mazda 6 7 8 6
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Steps of TOPSIS
Step 1: calculate (x2ij )1/2 for each column and
divide each column by that to get rij
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Steps of TOPSIS
Step 2 : multiply each column by wj to get vij.
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Steps of TOPSIS
Step 3 (a): determine ideal solution A*.
A* = {0.059, 0.244, 0.162, 0.080}
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An example of hierarchical value tree:
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Steps of AHP
1) Criteria weighting must be determined using
(m*(m-1))/2 pair wise comparisons.
2) Alternatives scoring using m*((n*(n-1))/2) pair
wise comparisons between alternatives for each
criteria.
3) After completing pair wise comparisons AHP is
just the hierarchical application of SAW.
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An example of using AHP method
selecting a new hub airport
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Scale of relative importance table
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Some AHP method shortcomings
Comparison inconsistencies:
decision-makers using AHP often make
inconsistent pair wise comparisons.
Rank reversals
changing of relative alternative rankings due to
the addition and deletion of alternatives.
Large number of comparisons
where there are either a large number of attributes
and/or alternatives to be evaluated.
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SMART(The Simple Multi Attribute Rating Technique )
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2) The difference between a value tree in SMART
and a hierarchy in AHP is that the value tree has a
true tree structure, allowing one attribute or sub-
criterion to be connected to only one higher level
criterion.
3) SMART does not use a relative method for
standardizing raw scores to a normalized scale.
Instead, a value function explicitly defines how
each value is transformed to the common model
scale. The value function mathematically
transforms ratings into a consistent internal scale
with lower limit 0, and upper limit 1.
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References:
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