Dr.

Basma Ezzat
 TOPSIS METHOD

Technique of Order
Preference by Similarity to
Ideal Solution

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 TOPSIS METHOD

➢ This method considers three types of attributes or criteria

❑ Qualitative benefit attributes/criteria
❑ Quantitative benefit attributes
❑ Cost attributes or criteria

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 TOPSIS METHOD
➢In this method two artificial alternatives are hypothesized:
➢Ideal alternative: the one which has the best level for all attributes
considered.
➢Negative ideal alternative: the one which has the worst attribute
values.
➢TOPSIS selects the alternative that is the closest to the ideal solution
and farthest from negative ideal alternative.

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 Input to TOPSIS

➢ TOPSIS assumes that we have m alternatives (options) and n

attributes/criteria and we have the score of each option with respect
to each criterion.
❑ Let xij score of option i with respect to criterion j
❑ We have a matrix X = (xij) with order mn matrix.
❑ Let J be the set of benefit attributes or criteria (more is better)
❑ Let J' be the set of negative attributes or criteria (less is better)

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 Steps of TOPSIS

Step 1: Construct normalized decision matrix.

❑This step transforms various attribute dimensions into non-dimensional
attributes, which allows comparisons across criteria.
➢Normalize scores or data as follows:
𝒓𝒊𝒋 = 𝒙𝒊𝒋/ (σ𝒋 𝒙𝟐𝒊𝒋) 𝒇𝒐𝒓 𝒊 = 𝟏, … , 𝒎; 𝒋 = 𝟏, … , 𝒏

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 Steps of TOPSIS
Step 2: Construct the weighted normalized decision matrix.
❑Assume we have a set of weights for each criteria wj for j = 1,…n.
❑Multiply each column of the normalized decision matrix by its associated
weight.
➢An element of the new matrix is:
𝒗𝒊𝒋 = 𝒘𝒋 𝒓𝒊𝒋

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 Steps of TOPSIS
Step 3: Determine the ideal and negative ideal solutions.
➢Ideal solution.
𝑨∗ = { 𝒗𝟏∗ , … , 𝒗𝒏∗ }, where
𝒗𝒊∗ = {max(𝒗𝒊𝒋) 𝒊𝒇 𝒋  𝑱 ; min(𝒗𝒊𝒋) 𝒊𝒇 𝒋  𝑱′ }
𝒋 𝒋

➢Negative ideal solution.

𝑨′ = { 𝒗𝟏′ , … , 𝒗𝒏′ }, where
𝒗′ = {min(𝒗𝒊𝒋) 𝒊𝒇 𝒋  𝑱 ; max(𝒗𝒊𝒋) 𝒊𝒇 𝒋  𝑱′ }
𝒋 𝒋
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 Steps of TOPSIS
Step 4: Calculate the separation measures for each alternative.
➢The separation from the ideal alternative is:
∗ ∗
𝑆𝑖 = [σ𝑗 (𝑣𝑗 – 𝑣𝑖𝑗)2] ½ , 𝒊 = 1, … , 𝑚

➢Similarly, the separation from the negative ideal alternative is:

𝑺′ = σ𝑗 𝑣 𝑗′ – 𝑣𝑖𝑗 2 ½ ,𝒊 = 𝟏, … , 𝒎
𝒊

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 Steps of TOPSIS
Step 5: Calculate the relative closeness to the ideal solution Ci*
∗ 𝑺′𝒊 ∗
𝑪𝒊 = ∗ , 𝟎  𝑪𝒊  𝟏
(𝑺𝒊 +𝑺′𝒊 )

➢ Select the option with Ci* closest to 1.

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 Example
Weight 0.1 0.4 0.3 0.2
Style Reliability Fuel Eco. Cost
Civic 7 9 9 8

Saturn 8 7 8 7

Ford 9 6 8 9

Mazda 6 7 8 6

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 Example
➢m = 4 alternatives (car models)
➢n = 4 attributes/criteria
➢xij = score of option i with respect to criterion j
➢X = {xij} with order 44 score matrix.
➢J = set of benefit attributes: style, reliability, fuel economy (more is
better)
➢J' = set of negative attributes: cost (less is better)
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 Example
Step 1(a): calculate 𝑥2𝑖𝑗 1Τ2
for each column
Style Rel. Fuel Cost
Civic 49 81 81 64

Saturn 64 49 64 49

Ford 81 36 64 81

Mazda 36 49 64 36
𝒙𝒊𝒋𝟐 230 215 273 230
𝒙𝟐𝒊𝒋 𝟏 Τ𝟐
15.17 14.66 16.52 15.17
 Example
Step 1 (b): divide each column by 𝑥2𝑖𝑗 1Τ2 to get 𝒓𝒊𝒋

Style Rel. Fuel Cost

Civic 0.46 0.61 0.54 0.53

Saturn 0.53 0.48 0.48 0.46

Ford 0.59 0.41 0.48 0.59

Mazda 0.40 0.48 0.48 0.40

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 Example
Step 2: multiply each column by 𝒘𝒋 to get 𝒗𝒊𝒋.

Style Rel. Fuel Cost

Civic 0.046 0.244 0.162 0.106

Saturn 0.053 0.192 0.144 0.092

Ford 0.059 0.164 0.144 0.118

Mazda 0.040 0.192 0.144 0.080

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 Example
Step 3 (a): determine ideal solution A*.
A* = {0.059, 0.244, 0.162, 0.080}
Style Rel. Fuel Cost
Civic 0.046 0.244 0.162 0.106

Saturn 0.053 0.192 0.144 0.092

Ford 0.059 0.164 0.144 0.118

Mazda 0.040 0.192 0.144 0.080

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 Example
Step 3 (b): find negative ideal solution A'.
A' = {0.040, 0.164, 0.144, 0.118}
Style Rel. Fuel Cost
Civic 0.046 0.244 0.162 0.106

Saturn 0.053 0.192 0.144 0.092

Ford 0.059 0.164 0.144 0.118

Mazda 0.040 0.192 0.144 0.080

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 Example
Step 4 (a): determine separation from ideal solution
A* = {0.059, 0.244, 0.162, 0.080},

Style Rel. Fuel Cost

Civic (.046-.059)2 (.244-.244)2 (0)2 (.026)2

Saturn (.053-.059)2 (.192-.244)2 (-.018)2 (.012)2

Ford (.059-.059)2 (.164-.244)2 (-.018)2 (.038)2

Mazda (.053-.059)2 (.192-.244)2 (-.018)2 (.0)2
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 Example
Step 4 (a): determine separation from ideal solution Si*
∗ ∗
𝑆𝑖 = [ σ𝑗(𝑣𝑗 – 𝑣𝑖𝑗)2] ½ for each row
(vj*–vij)2 Si* = [  (vj*– vij)2 ] ½

Civic 0.000845 0.029

Saturn 0.003208 0.057

Ford 0.008186 0.090

Mazda 0.003389 0.058

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 Example
Step 4 (b): find separation from negative ideal solution
A' = {0.040, 0.164, 0.144, 0.118}

Style Rel. Fuel Cost

Civic (.046-.040)2 (.244-.164)2 (.018)2 (-.012)2

Saturn (.053-.040)2 (.192-.164)2 (0)2 (-.026)2

Ford (.059-.040)2 (.164-.164)2 (0)2 (0)2

Mazda (.053-.040)2 (.192-.164)2 (0)2 (-.038)2
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 Example
Step 4 (b): determine separation from negative ideal solution Si'
𝑺′ 𝒊 = σ𝑗 𝑣 𝑗′ – 𝑣𝑖𝑗 2 ½ for each row
(vj'–vij)2 Si' = [  (vj'– vij)2 ] ½

Civic 0.006904 0.083

Saturn 0.001629 0.040

Ford 0.000361 0.019

Mazda 0.002228 0.047

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 Example
Step 5: Calculate the relative closeness to the ideal solution
∗ 𝑺′𝒊
𝑪𝒊 = ∗
(𝑺𝒊 +𝑺′𝒊 ) * *
S'i /(Si +S'i) Ci

Civic 0.083/0.112 0.74  BEST

Saturn 0.040/0.097 0.41

Ford 0.019/0.109 0.17

Mazda 0.047/0.105 0.45

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 Application

Implementation of TOPSIS Technique for Supplier

Selection