Definition of multiple criteria decision analysis
Multiple criteria decision analysis (MCDA) is an advanced field of operations research and management science, devoted to the development of decision support tools methodologies to address complex decision problems involving multiple criteria goals or objectives of conflicting nature.
The development of multi criteria decision analysis can be traced back to the 18th century works on social choice theory by the Marquis de Condorcet and Jean-Charles de Borda. At the end of the 19th century, Vilfredo Pareto’s work on the concept of efficiency also became a reference. Modern MCDA is founded on work carried out in the 1940s by John von Neumann and Oskar Morgenstern on expected utility theory and on Bernard Roy’s work on outranking relations which dates from the 1960s.
Current multi criteria decision analysis research focuses on behavioural aspects of decision making, problem structuring procedures, methodologies for optimisation under multiple objectives, multi attribute utility/value theory, outranking decision models, and preference disaggregation techniques for inferring decision models from data. Multi criteria decision analysis is concerned with a variety of different types of decision problems, including deterministic problems, decision making under uncertainty and fuzziness, dynamic problems and group decisions. Over the years multi criteria decision analysis has developed strong links with other quantitative disciplines such as computer science, artificial intelligence and evolutionary computation.
MCDA introduces sound procedures for problem structuring and criteria aggregation, which can be used to rank and classify a set of alternative options or to choose the best ones. Except for the normative and descriptive aspects of decision-making, MCDA also adds a constructive perspective, in which a decision model is built through a progressive learning process that enhances the decision maker’s understanding of the problem and ultimately facilitates the construction of a good model. Thus, a decision model is interactively constructed with the active participation of the decision-makers, taking into account their system of values and judgment policy as well as their expertise on the particular problem under consideration.
Multi criteria decision analysis has been used in a wide variety of fields such as energy management, environmental planning, public services, healthcare, transportation, logistics, marketing, human resources management, and finance. Multi criteria decision analysis approaches have been widely used by public entities, firms, and organisations, such as the European Commission and the UK Department of Department for Communities and Local Government). The research and practice in the area of MCDA is supported by the International Society on Multiple Criteria Decision Making, the EURO Working Group Multicriteria Decision Aiding, and several laboratories in universities all over the world (LAMSADE - Université Paris Dauphine, France, Laboratory of Intelligent Decision Support Systems - Poznan University of Technology, Poland, Financial Engineering Laboratory - Technical University of Crete, Greece, etc.)