Multi-objective decision making: Operational features

Abstract

Decision making in various contexts can be seen as a process of choice making amongst alternative opportunities of action. One such context which is fast becoming is the decision making under multiple objectives. In this dissertation we have examined the operational features of decision making under multiple objectives through three interlinked studies. In the context of managerial decision making such research information was felt to be of importance utility. It was also highlighted by lack of studies in this direction in the past and an increasing number of studies currently. We found through our first study that the process of resorting to judgemental expression of trade-offs in decision making situations under multiple objectives using descriptive phrases lead to serious problems. These practices affected the communication and the judgements both across situations for the same person and across persons in the same situation. This highlighted the need for assigning numerical values to judgemental expressions to trade-off. Some methods have been proposed for the elicitation of value preference structures/value functions and trade-off through numerical assignments. In our second study we examined two specific methods viz., the Lock-step method and the Mid-value splitting method for their operational features. We constructed a multiobjective decision situation for this. The results of this study showed that when quality vs. cost trade-offs were made the two methods could lead to different (opposite)value functions/structures. This indicated that using only one of these methods could lead to elicitation of value functions contradictory to decision maker’s value preference structure. We then modified the method and suggested protocol. This protocol was confirmed to give similar value functions/value preference structures when applied to the same situation. Our third study comprised the application of the suggested protocol in the decision making situation of selection of a computer system. This has become an important decision for many organizations. The selection process was modeled as a multiobjective decision situation. The value function of a decision maker was elicited. The applications of the suggested protocol for further research have been indicated.