IOSR Journal of Engineering IOSR JEN Vol
IOSR Journal of Engineering IOSR JEN Vol
org
ISSN (e): 2250-3021, ISSN (p): 2278-8719
Vol. 04, Issue 05 (May. 2014), ||V2|| PP 15-25
Abstract: – As the real world problems are so tangled, so the task of decision making associated with them is
equally complex. Therefore, some efficient techniques are required which limelight the best solution. For the
choice of the optimal selection with respect to the given criteria, this paper has summarized three major and
useful techniques of Multiple Criteria Decision Making (MCDM), namely, WSM (Weighted Sum Method),
AHP (Analytic Hierarchy Process) and TOPSIS (Technique for Ordered Preference By Similarity to Ideal
Solution). The paper highlights the basic steps involved in each of the techniques for choosing the most suitable
alternative from among the varied options under consideration.
I. INTRODUCTION
In order to attain an optimal solution in the presence of so many closely similar options, a strategic
move is to be adapted. The alternative are different but since they belong to the same real world set of entity, so
the process of the choice of the best among the better options is tricky and requires some degree of insight.
To optimize the process of the choice, there is a need for the basis which could help differentiating the
alternatives and rank the given choices. For doing so, some qualitative and quantitative factors are to be selected
which could help in discriminating the alternatives. Such set of factors are collectively known as criteria. For the
optimal selection, the alternatives are compared against the selected criteria. Therefore, MCDM is the
composition of set of multiple criteria, set of alternatives and their comparison in some manner.
The problem which has been used as a reference in this paper, to describe various techniques- the alternatives
are „the cars‟ from same or different companies; the criteria include both qualitative as well as quantitative
criteria. Qualitative criteria include reliability and style where as quantitative criteria include fuel economy and
cost. These are the criteria against which the alternatives have to be compared. The alternative which suits in all
the ways is chosen as the best resulting solution. The parameters for optimal choice of the car are as under:-
A. Reliability- Reliability is the probability of failure-free operation of a product for a specified time in a
specified environment i.e. for how long the product will work effectively without any failure while the product
is under use. So, greater will be the reliability, more will be the probability of failure free life of the product.
B.Style- Style includes the basic appearance, the design and the comfort level of the product. Style directly
doesn‟t affect the quality of the product and of course is a voluntary option. But as the priorities of the masses
are being diverted from economical perspective to qualitative perspective, so style is being given greater
importance.
C. Fuel Economy- Generally known as mileage, is a basic measure which tells about the fuel consumption
per unit distance (km). It reveals how suitable and economical will be the product to the buyer. Lesser is the fuel
consumption, higher will be the fuel economy.
D. Cost- Last but not the least rather a major quantitative criteria is the cost. Cost for a car includes actual
showroom price, registration price, insurance and accessories price. For a better quality the cost is higher but
usually the buyer has a limited budget and therefore the choice is very critical as it is difficult to compromise
with the quality also. So, this quantitative factor needs a greater insight.
The Fig.1, describes the car selection problem using a hierarchical tree structure. Rectangular boxes represent
the criteria against which the alternatives, represented using oval structure are to be compared and final choice
has to be done.
However, simply using every criterion in the selection process is not the best approach because the more criteria
used, the more information is required, which will result in higher computational cost. The defined evaluation
criteria will be used as the attributes of a MCDM formulation and as the input data of decision matrix for
method selection.
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MCDM methods which can perform feasibility evaluation remain as the candidate MCDM methods for further
selection.
AF wiIi
the MCDM methods. The method with the highest AF, using equation (i), will be recommended as the most
appropriate method to solve the problem under consideration.
(i)
Ii {b1, b2 bn}
bi 1, cji a i or
bi 0, cji a i
I 1, 2n ; j 1, 2m
given problem, and W W1 ,W2 ,W3Wn , is the weighting vector on the evaluation criteria, bi is the
where I is the number of evaluation criteria used to examine the decision making methods with respect to the
th th th
value of the i characteristic of the decision problem, and Cij is the value of i characteristic of the j
method. The MCDM method which has the highest AF will be selected as the most appropriate method to solve
the given decision making problem.
PROCESS
Following generic steps are followed in calculating the relative score for each alternative:-
SSi wi xij
The equation used for calculating the summated score of each alternative is :-
i 1
WSM allows well structuring of the problem under consideration, explicitly describing the alternatives,
Strengths
It is a simpler, easy and very suitable approach for solving the multi criteria problems.
criteria and their relative scores and weights.
Depiction of the prioritized criteria and the entire computation is comparatively clear and understandable.
A major drawback which can be visualized in almost all the techniques of MCDM is that the assignment of
Weakness
the weight is a voluntary choice, it not only requires profound insight rather the assignment need to be quite
accurate (accuracy itself is a voluntary entity and may differ from problem to problem and situation to
Weight summation can be accurate if attributes are additive i.e. they must differ from each other in some or
situation).
Example
Now, following is the car selection. There are 3 alternatives, Car A, B, C. The criteria considered are
Reliability, Style, Fuel Economy and Cost. The solution required is the final optimal choice that on the basis of
these factors, associated weights and the relative scores which can be the best choice of the car. Following is the
table defining the scores and the weights:-
Following we calculate the summated weighted of each alternate according to equation (ii) starting with Mazda.
The maximum score out of all the alternatives is of Car C, hence according to this data and WSM, Car B is
considered to be the most optimal choice.
Decomposition- As in the WSM, decomposition is associated with breaking the entire problem into its sub parts,
in the form of hierarchical structure, thus revealing out the basic structure.
Comparative Judgment - The process of comparative judgment is a two level process. Initially, a matrix of type
AN * N is formed in which the relative comparison of alternate with another alternate is done, thus N here is the
number of alternatives. Likewise M metrics are generated of such form, where M is the number of criteria under
consideration. So, basically this level of comparison consist of M metrics (one with respect to each criteria)
containing the comparison of alternatives among each other. The entries in these matrices, e ij is done according
to AHP original measurement scale from one to nine, as given in the following table.
This value is selected basically by the DM defining the relative value (importance) of one alternative when
compared with the other keeping one criteria fixed i.e. prioritizing the alternatives on the basis of individual
criteria. After the matrix, corresponding to each criterion has been made, it is the time to construct the
normalized matrix out of these. A normalized element r ij obtained using equation (iii),
r ij
e
aij
N
(iii)
ij
i 1
where, a ij is the element of initial matrix AN*N divided by the sum of all the elements of its respective column.
After the normalized matrix for each criteria has been obtained, the weight vector has to be calculated as
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Major MCDM Techniques and their application-A Review
c
N r ij
1
N
(iv)
i 1
where N is the number of alternatives.
Final step is the formation of an eign vector, which is nothing but ranking of the alternatives according to the
particular criteria. Largest value in the eign vector is ranked highest then the smaller then smallest.
Recursively applying the same sequential steps on all the M metrics give the ranking of all the alternative with
each possible criteria.
Using the same set of steps, beginning with the initial matrix C M*M, (containing the criteria
comparison), one more set of eign vector values are generated in addition to the above. Thus, generating the
ranking values for the respective criteria too. Though the ranks have been provided to the alternatives as well as
to the criteria, but how can one justify that these values are accurate. For this purpose a consistency check has to
be performed using the following equation (v) :-
CR
CI
(v)
RI
where, CR is the Consistency Ratio, whose value defines whether the results are consistent or not. CI is
the Consistency Index and RI is the Random Index. A perfectly consistent values for CR corresponds to 0,
which is basically an ideal case and that isn‟t practically feasible. A value of CR which is equal or less than 0.1
indicates acceptable level of consistency in the pair wise matrix, hence acceptable. However, if the value of CR
exceeds 0.1, the comparison values are inconsistent and evaluators need to review their judgments.
CR
CI
(vi)
CR
max n
CI
n 1
(vii)
The next stage is to calculate max so as to lead to the Consistency Index and Consistency Ratio.
Step 1: Find the product of A (initial weight matrix) and x (eign vector), A* x
Step 2: Lets say, result matrix is Ax. So, now divide Ax by x.
Step 4: This summated value is max and N is the no. of alternatives, hence CI can be calculated using equation
Step 3: Sum up each element of this resulting matrix.
(v).
Step 5: RI depends on the number of elements being compared i.e. N, when alternatives are compared and M
when criteria are compared. A scale has been defined which gives a value of RI corresponding to the no. of
elements in comparison.
Example
Following is a comparison matrix of cars with respect to the criteria “reliability” which will be developed in the
car selection problem. All essential steps are described using this matrix.
max , we get 3.019. Using equation (vii) the value of CI is 0.010. Using the scale for finding RI, we get
Now, it is the time to check the consistency of these values. Using the above described steps for calculating,
RI 0.58 . Hence, using equation (v) CR is 0.017. The value is less than 0.1, hence it is acceptable level of
consistent.
The same comparison matrix has to be made for each of the criteria. Same set of operations has to be performed
on each matrix, and ranking has to done for each one. After this, Comparison matrix of the criteria is to be
made, their relative priority will be measured with its eign vector.
Comparison matrix of alternative with respect to the criteria Cost.
Table 5 : Comparison matrix w.r.t. Cost Table 6 : Comparison matrix w.r.t. Fuel Economy.
Cost Car A Car B Car C Fuel Economy Car A Car B Car C
Car A 1 1/3 ¼ Car A 1 1/4 1/6
Car B 4 1 1/3
Car B 3 1 ½
Car C 6 3 1
Car C 4 2 1
Column Sum 11 17/4 9/6
Column Sum 8 10/3 7/4
The eign vector „x‟ obtained using equation (iii) is
The eign vector „x‟ obtained using equation (iii) is
Car A 0.087
Car A 0.123
Car B 0.274
Car B 0.320
Car C 0.639
Car C 0.557
Cost 0.398
F uel Economy 0.085
Re liability 0.218
Style 0.299
Finally when everything has been ranked, the answer for the optimal choice is left and that can be deduced by
the following way :-
The highest value has been scored by car B. Hence the optimal choice is of Car B.
TOPSIS is another technique developed by HWANG and YOON in 80s, but is being used widely even today.
Though the technique has same pet constituents but the principle is quite different The principle of TOPSIS is
“The chosen Alternative should have the shortest distance from the ideal solution and the farthest from the
negative-ideal solution” Therefore, the method stress on the calculation of the best i.e. the ideal case as well as
the worst i.e. negatively ideal case. TOPSIS selects the alternative whose value is closest to the ideal solution
and farthest from the negatively ideal solution [7]. Once these values have been found, the optimal case can be
generated easily. The major highlights of TOPSIS are :-
1) It is very rational approach where each step of the calculation is very logical and understandable.
2) The calculation involved are simple and straight forward.
3) This technique involves the generation of the ideal and the negative ideal cases, in addition to the generation
of most optimal (practically feasible solution).
Table 9: Initial score and weight table for Car selection problem
Criteria Reliability Style Cost Fuel Economy
(0.4) (0.1) (0.3) (0.2)
Car A 9 6 6 8
Car B 7 7 8 9
Car C 9 8 7 8
TOPSIS differentiates among the criteria on the basis of their effect and so two different categories have been
made namely, J and J` . J consist of the attributes which are to be maximized i.e. Reliability, Style and Fuel
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Economy where as J` comprises of Cost criteria as lesser is the cost more will be the benefit, so cost has to be
minimized.
Step 2- Construction of the normalized matrix- The values from the previous matrix are transformed into the
form such that their mutual comparison could be done. So, normalization is done as follows yielding out matrix
XN which contain values xnij :-
Zij
( Xij )
Xij
2 1
(viii)
2
Table 10: Table showing xij2, ∑xij2 , (∑xij2)1/2 Table 10: Normalized Matrix(xn ij)
Reliabil Style Cost Fuel Reliability Style Cost Fuel
ity Econom Eco.
y Car
Car A 49 36 36 64 A 0.523 0.491 0.491 0.553
Car B 81 49 64 81 Car
Car C 49 64 49 64
B 0.672 0.573 0.655 0.622
Car
∑xij2 179 149 149 209
C 0.523 0.655 0.573 0.553
(∑xij2)1/2 13.379 12.206 12.206 14.456
Step 3 – This step says that the normalized values now must be multiplied with the weight associated with its
corresponding criteria.
Table 11: Multiplication of each column elements with respective criteria weight.
Reliability Style Cost Fuel
Eco.
Car A 0.209 0.049 0.098 0.165
Car B 0.269 0.057 0.131 0.186
Car C 0.209 0.065 0.114 0.165
Step 4 – Here arises the need to differentiate between the ideal and the negatively ideal solution. For the ideal
solution we will determine the highest value for those criteria which are to be maximized (Reliability, Style and
stored in set I {0.269 , 0.065 , 0.098 , 0.186 } . On the contrary, for the negatively ideal solution, the
Fuel Economy) and the lowest value of the minimizing criteria (Cost) are to be selected. So, this ideal solution is
*
Step-5 : Now we will determine the separation from the ideal solution and separation from the negatively ideal
solution by subtracting I* and I` individually from just previous matrix and squaring these values.
Table 12: Separation from ideal solution Table 13 : Seperation from negatively ideal solution
(subtracting I*) (subtracting I `)
Reliability Style Cost Fuel Eco. Reliability Style Cost Fuel Eco.
Car (- 0.06)2 (- 0.016)2 (0)2 (- 0.02)2 Car (0)2 (0)2 0 (0)2
A A
Car (0) (- 0.008)2 (0.033)2 (0)2 Car (0.06)2 (-0.008)2 (0.049)2 (0.021)2
B B
Car (- 0.06)2 (0)2 (- 0.017)2 (0)2 Car (0)2 ( 0.016)2 (- 0.017)2 (0)2
C C
Step 6 – Now sum up the values row wise, for all the criteria for 1 particular alternative and then take the under
root gives values T* and T` for ideal and negatively ideal solution respectively.
For Ideal Solution:
0.00040092 0.02002
0.001089 0.033
For Negative ideal solution:
Car A
0.001153 0.0339
Car A
0.024664 0.15704
Car B
0.004256 0.06523
Car B
0.000515 0.02269
Car C
Car C
Step 7 – Last and the final step is the final choice which is done using Ci *
T'
T T'
, the highest value of Ci is
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