The MOORA method and its application to privatization in a transition economy

A new method is proposed for multi-objective optimization with discrete alternatives: MOORA (Multi-Objective Optimization on the basis of Ratio Analysis). This method refers to the matrix of responses of alternatives to objectives, to which ratios are applied. A well established and recognized other method for multi-objective optimization is used for comparison, namely the reference point method. It is demonstrated that this is the best choice among the different competing methods. In MOORA, the set of ratios has the square roots of the sum of squared responses as denominators. These ratios, as dimensionless, seem to be the best choice among different ratios. The dimensionless ratios, situated between zero and one, are added in the case of maximization or subtracted in case of minimization. Finally, all alternatives are ranked, according to the obtained ratios. Eventually, to give more importance to an objective, an objective by can be replaced by different sub-objectives or a coefficient of importance can be specified.