MCDM'08 - paper no. 3

 

Back to MCDM'08 contents
 

Multi-criteria decision aiding procedure under risk

Cezary Dominiak

Abstract:

Decision making under uncertainty is a very important area of decision theory. Uncertainty implies that in certain situations a person does not have the information which would adequately describe, prescribe or predict a system, its behavior or other characteristics, deterministically and numerically. Thus uncertainty relates to a state of the human mind, i.e., lack of complete knowledge about something.
In this paper we propose an interactive multicriteria decision aiding procedure which enables to take into consideration together uncertainty and risk factors. The uncertainty factors we consider when we don't know the probabilities of the states of nature. The risk factors are applied when we are able to estimate the probability distributions.
The proposed procedure uses scenario planning technique to deal with uncertainty and Monte Carlo simulation to deal with risk factors.
Proposed decision aiding procedure is illustrated by the complete numerical example.

Keywords:

Multicriteria decision aiding, risk, uncertainty. Monte Carlo simulation, scenario planning

Reference index:

Cezary Dominiak, (2009), Multi-criteria decision aiding procedure under risk, Multiple Criteria Decision Making (4), pp. 61-88

Full text:

download

Scopus citations in 4 paper(s):
  1. Gaspars-Wieloch, H. (2013, 5). Modifications of the Hurwicz's decision rule. Central European Journal of Operations Research, 22, 779-794. doi:10.1007/s10100-013-0302-y
  2. Gaspars-Wieloch, H. (2016, 10). Newsvendor problem under complete uncertainty: a case of innovative products. Central European Journal of Operations Research, 25, 561-585. doi:10.1007/s10100-016-0458-3
  3. Gaspars-Wieloch, H. (2017, 11). Project Net Present Value estimation under uncertainty. Central European Journal of Operations Research, 27, 179-197. doi:10.1007/s10100-017-0500-0
  4. Gaspars-Wieloch, H. (2017, 3). A decision rule based on goal programming and one-stage models for uncertain multi-criteria mixed decision making and games against nature. Croatian Operational Research Review, 8, 61-76. doi:10.17535/crorr.2017.0004