Project prioritization under policy restrictions. A combination of Multiple Criteria Decision Aid methods with 0–1 programming

Project prioritization under policy restrictions. A combination of Multiple Criteria Decision Aid methods with 0–1 programming

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Article ID: iaor2007635
Country: Netherlands
Volume: 171
Issue: 1
Start Page Number: 296
End Page Number: 308
Publication Date: May 2006
Journal: European Journal of Operational Research
Authors: , ,
Keywords: programming: integer
Abstract:

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 multiple criteria 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 multiple criteria method. In such a case the problem solution is to find a set of alternatives satisfying the constraints and at the same time maximizing a measure of global performance. The proposed procedure relies on the PROMETHEE V method which belongs to the well-known PROMETHEE family of multiple criteria outranking methods and is combined with an integer programming formulation capable to effectively deal with the problem's 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.

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