A note on scale transformations in the PROMETHEE V method

A note on scale transformations in the PROMETHEE V method

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Article ID: iaor20121867
Volume: 219
Issue: 1
Start Page Number: 198
End Page Number: 200
Publication Date: May 2012
Journal: European Journal of Operational Research
Authors: ,
Keywords: decision theory: multiple criteria
Abstract:

As already noted by , the PROMETHEE V method for multi‐attribute analysis of portfolio problems will fail to include an item in a portfolio if it has a negative net flow with respect to other items, although adding such an item might actually improve the entire portfolio. However, the model formulated by Mavrotas et al. introduces a bias in favor of large portfolios because the PROMETHEE V method is sensitive to scale transformations. The present paper analyzes this effect and proposes a method to correct it.

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