Multi-criteria Methods

For many investment decisions, the decision-maker wishes to pursue several targets, rather than a single target as the earlier chapters have assumed. Such a decision-making problem is typical in strategic investment decision-making as, for example, when installing a new plant in a new location, using new technology and/or manufacturing a new product. Non-monetary measures have to be considered and a number of complex alternatives need to be analysed. This chapter describes a number of multi-criteria methods, such as: the utility value analysis, the analytic hierarchy process, the multi-attribute utility theory and PROMETHEE.