Article ID: | iaor20041099 |
Country: | Greece |
Volume: | 1 |
Issue: | 3 |
Start Page Number: | 299 |
End Page Number: | 314 |
Publication Date: | Sep 2001 |
Journal: | Operational Research - An International Journal |
Authors: | Diakoulaki D., Mavrotas G., Caloghirou Y. |
Keywords: | forecasting: applications, programming: integer |
Multiple Criteria Decision Aid methods are increasingly used in financial decision making in order to capture the multifaceted character of modern enterprises activated in a complex and versatile market environment. This paper presents a multicriteria approach for the selection of firms applying for financial support from public funds. Besides the budget constraint, the specific decision situation imposes the consideration of additional policy constraints that prevent from directly exploiting rankings provided by a multicriteria method. In such a case the problem solution is to find a set of alternatives satisfying the constraints and at the same time maximising a measure of global performance. The proposed procedure relies on the PROMETHEE V method which belongs to the well-known PROMETHEE family of out-ranking methods and is capable to effectively deal with the problem's multicriteria and combinatorial character. This method is modified in order to avoid any bias in the selection of the optimal set that may arrive because of the apparent contradiction between the rate of resources consumption and the coefficients of the alternatives in the additive objective function. The proposed modification results in a fractional objective function which is linearised by means of a suitable mathematical transformation.