Multi-Criteria Decision Making

Decision making is a process in which, under any given situation, specific criteria are observed to identify the best option among all time. It is crucial for both organizations and individuals to manage their decision-making processes accurately and make sound decisions active.

Information and technology are rapidly changing and new problems are emerging. Finding the best option for decision makers is a challenging task. When choosing among alternatives, decision makers must consider multiple criteria and identify the option that most effectively reconciles conflicting objectives. Decision makers evaluate their available resources and movement areas and assess how their decisions will affect other individuals and units. The effectiveness of decisions is tied to achieving desired outcomes, and reaching those outcomes determines decision effectiveness. Multi-criteria decision making methods play a significant role in decision processes involving multiple criteria place.

What Is Multi-Criteria Decision Making?

Multi-criteria decision making can be defined as the process by which a decision maker selects an option using at least two criteria. It is a multidisciplinary framework that integrates social sciences, economics, management, engineering such as and other disciplines to enable decision makers to evaluate complex, multidimensional decision problems. In a rational decision-making environment, the most preferred option is typically constrained by existing limitations.

Within studies on multi-criteria decision making, Işıklar and Büyüközkan (2007) aimed to rank preferred hand phones using multi-criteria decision making methods. Opričnik and Tzeng (2007) analyzed the site selection of a hydroelectric power plant in Yugoslavia using an extended VIKOR method. Demireli (2010) evaluated the performance of public banks operating in Türkiye using the TOPSIS method among multi-criteria decision making techniques. Akyüz et al. (2011) analyzed the ten-year financial data of a firm in the ceramic sector. Nightingale and Köse (2011) assessed and ranked the performance of 19 firms in the food sector using the TOPSIS and ELECTRE methods. Cristobal (2011) applied the VIKOR method in selecting renewable energy projects. Urfalıoğlu and Genç (2013) evaluated Türkiye’s economic performance relative to EU countries using the TOPSIS, ELECTRE and PROMETHEE methods.

Multi-criteria decision making has demonstrated substantial development in both theoretical advancement and practical applications within decision analysis. It has gained widespread acceptance due to its strong logical structure and success in decision determination, and it encompasses a broad work scope.

Multi-Criteria Decision Making Problems

Multi-criteria decision making problems can be defined as those in which the best alternative is selected from a set of possible options where multiple criteria are optimized. To reach the optimal solution in multi-criteria decision making problems, various multi-criteria decision making methods can be employed. Each method has certain advantages over others. One of the challenges decision makers face at the outset is determining which method is most appropriate method. When identifying the most suitable method, decision makers must consider the structure of the problem and the characteristics of the process. When selecting a multi-criteria decision making method, factors such as the evaluation scale of the problem, the decision maker’s expectations, the data volume, the problem’s structure, criterion diversity, and uncertainty conditions must be taken into account.

All problems in the process involve multiple criteria. Relevant criteria are identified for each problem set. Although hundreds of factors may need to be considered in decision making, the decision maker can select the most important ones as criteria.

The decision maker will determine the most suitable alternative among existing options through a three-stage process, under the condition of established criteria. The first stage involves identifying the criteria and ranking their relative importance. The second stage determines the extent to which each alternative satisfies each criterion, leading to an overall evaluation for every alternative. The final stage involves selecting the alternative with the highest score.

Multi-criteria decision making problems can be examined under three main categories: selection problems, classification problems, and ranking problems.

In selection problems, the goal is to determine which alternative among many is the most beneficial. The objective in selection problems is either to identify the best option from a set of alternatives or to make a good choice from a set of alternatives where comparison is difficult or where weights are equal. In short, it involves selecting the correct alternative from the alternative set.

Classification techniques group alternatives. In such problems, alternatives are categorized according to specific criteria or preferences. The goal here is to re-group alternatives that exhibit similar characteristics and behaviors.

Ranking techniques establish order among alternatives. In ranking problems, alternatives can be measured or defined from best to worst.

As shown in the image above, various decision-making techniques are used in selection, ranking, and classification problems. Generally, among the most frequently preferred methods in studies are AHP, TOPSIS, and ELECTRE.