ABSTRACT
Chapter 4 covers techniques to rank entities or alternatives when the decision-maker has criteria to be considered that impact the decision-making process. Consider a problem where management needs to prioritize or rank order alternative choices such as identify key nodes in a business network, picking a contractor or subcontractor, choosing an airports, ranking recruiting efforts, ranking banking facilities, and ranking schools or colleges. How does one proceed to accomplish this analytically? Discussions and illustrative problems are presented in data envelopment analysis using linear programming (LP), sum of additive weights, analytical hierarchy process (AHP), and technique of order preference by similarity to ideal solution (TOPSIS). In our current modeling courses, we present these techniques to our students who are finding more and more applications in business, industry, and government (BIG). In addition, we discuss multiple weighting schemes that can be used in the ranking process. Multiple-attribute decision-making (MADM) concerns making decisions when there are multiple but a finite list of alternatives and criteria. This differs from analysis where we have alternatives and only one criterion such as cost. We address problems such as in the DHS scenario where we have seven alternatives and six criteria that impact the decision. For each method, we describe the method and provide a methodology, discuss some strengths and limitations to the method, discuss tips for conducting sensitivity analysis, and present several illustrative examples.
