Multi-criteria Decision Problems

The essential part of multi-criteria decision analysis is structuring a value tree (or a decision hierarchy). Important in this phase is to find the relevant set of criteria and their potential sub-criteria. In this chapter, a definition for such a good set of criteria is provided. It is also important to design good decision alternatives. Therefore, hints on how to produce these alternatives are given. Another important aspect in multi-criteria analyses is the trade-offs between the criteria. These trade-offs can be inferred from the choices the decision-maker makes, either from actual or stated choices. We present different multi-attribute utility models and the interpretations of trade-offs these approaches imply. We present different approaches such as MAUT-related methods and the analytic hierarchy process (AHP)-related methods for estimating the trade-offs (or parameters of the utility functions) from stated choices. We present how the methods are applied for selecting the best alternative or ranking the alternatives in multi-criteria problems. We discuss the differences between the approaches and between the interpretations of the results.

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