Chapter 9

Multiple Criteria Decision Making: Foundations and Some Approaches

Murat Köksalan

Industrial Engineering Department, Middle East Technical University, 06531 Ankara, Turkey, koksalan@metu.edu.tr

Jyrki Wallenius

Department of Information and Service Economy, Aalto University School of Business, 00076 Aalto, Finland, jyrki.wallenius@aalto.fi

Abstract

In this tutorial, we define key terminology (such as efficiency, nondominance, ideal solution, nadir solution) and discuss fundamental ideas of generating nondominated solutions in multiple criteria decision making. A key to understanding the concept of nondominance is the objective function space representation. Numerous examples and graphical representations are provided to illustrate the theory. We distinguish between multiple criteria evaluation problems and multiple criteria design problems. We discuss various approaches for solving both types of problems. We cover the popular class of approaches based on the progressive articulation of preferences (interactive approaches) in detail. These approaches elicit preference information from the decision maker during the solution process, in contrast with the approaches that require prior and posterior articulation of preferences.

Key words: multiple criteria; efficient solution; nondominated solution; interactive approach

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Citation information:

Köksalan, M., Wallenius, J. Multiple Criteria Decision Making: Foundations and Some Approaches. P. Mirchandani, ed. INFORMS TutORials in Operations Research, Vol. 9. INFORMS, Hanover, MD, pp. 151--170.

http://dx.doi.org/10.1287/educ.1120.0097