Tag: decision making

Introduction to Multi-Criteria Decision Making (MCDM)

By Shashikant Nishant Sharma

In the modern decision-making landscape, where complexity and the need for nuanced choices abound, Multi-Criteria Decision Making (MCDM) emerges as a pivotal research technique. MCDM encompasses a range of methodologies and tools designed to evaluate, prioritize, and select options based on multiple conflicting criteria. This approach is invaluable across various domains, including business, engineering, environmental management, and public policy, where decisions are rarely black and white.

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Core Concepts of MCDM

1. Criteria and Alternatives: At the heart of MCDM are two fundamental components: criteria and alternatives. Criteria represent the dimensions or attributes against which decisions are evaluated, while alternatives are the different options or courses of action available. For instance, in selecting a location for a new manufacturing plant, criteria might include cost, proximity to suppliers, environmental impact, and local labor availability.

2. Decision Matrix: A decision matrix is a common tool in MCDM, where alternatives are listed against criteria in a tabular format. Each cell in the matrix contains a value representing the performance of a particular alternative against a specific criterion. This matrix serves as the foundation for further analysis.

3. Weighting of Criteria: Different criteria often hold varying levels of importance in the decision-making process. Weighting involves assigning a relative importance to each criterion, typically through techniques like pairwise comparisons, direct rating, or the Analytic Hierarchy Process (AHP). These weights ensure that more critical criteria have a greater influence on the final decision.

Prominent MCDM Techniques

1. Analytic Hierarchy Process (AHP): Developed by Thomas L. Saaty in the 1970s, AHP is one of the most widely used MCDM techniques. It involves decomposing a decision problem into a hierarchy of sub-problems, comparing elements pairwise, and calculating weighted scores to rank alternatives. AHP is particularly useful for complex decisions requiring both qualitative and quantitative assessments.

2. Technique for Order Preference by Similarity to Ideal Solution (TOPSIS): TOPSIS is based on the concept that the chosen alternative should have the shortest geometric distance from the ideal solution and the farthest distance from the negative-ideal solution. It involves normalizing the decision matrix, calculating the Euclidean distance for each alternative, and ranking them accordingly.

3. Preference Ranking Organization Method for Enrichment Evaluation (PROMETHEE): PROMETHEE is a family of outranking methods that evaluate alternatives based on preference functions. It helps decision-makers visualize the strengths and weaknesses of each alternative through graphical representations like the PROMETHEE I partial ranking and PROMETHEE II complete ranking.

4. Simple Additive Weighting (SAW): SAW, also known as the weighted sum method, is a straightforward technique where each alternative’s performance scores are multiplied by the respective criterion weights and summed up. The alternative with the highest total score is considered the best choice.

Applications of MCDM

1. Business and Management: MCDM techniques are extensively used in strategic planning, resource allocation, project selection, and performance evaluation. For instance, companies can employ AHP to prioritize projects based on criteria like cost, return on investment, and strategic alignment.

2. Engineering and Technology: In engineering, MCDM aids in material selection, design optimization, and risk assessment. Techniques like TOPSIS can help engineers select the best materials for a specific application by evaluating properties such as strength, weight, and cost.

3. Environmental Management: MCDM is crucial in environmental decision-making, where trade-offs between economic development and environmental sustainability must be carefully balanced. PROMETHEE and AHP are often used to assess the impacts of various policies and select the most sustainable options.

4. Public Policy: Governments and policy-makers use MCDM to address complex societal issues, such as urban planning, healthcare, and education. MCDM techniques facilitate transparent and rational decision-making by considering diverse stakeholder perspectives and conflicting objectives.

Challenges and Future Directions

Despite its widespread applicability, MCDM is not without challenges. Key issues include the subjectivity in criteria weighting, the complexity of certain methods, and the need for accurate and comprehensive data. Future research is likely to focus on integrating MCDM with artificial intelligence and machine learning to enhance decision support systems, improve robustness, and handle large datasets more efficiently.

Conclusion

Multi-Criteria Decision Making stands as a vital tool in the arsenal of modern decision-makers. By systematically evaluating alternatives against a set of diverse and often conflicting criteria, MCDM facilitates more informed, transparent, and rational choices. As complexity in decision-making continues to grow, the evolution and adoption of MCDM techniques will remain crucial in navigating the multifaceted challenges of the contemporary world.

References

Dehalwar, K., & Sharma, S. N. (2023). Fundamentals of Research Writing and Uses of Research Methodologies. Edupedia Publications Pvt Ltd.

Kumar, A., Sah, B., Singh, A. R., Deng, Y., He, X., Kumar, P., & Bansal, R. C. (2017). A review of multi criteria decision making (MCDM) towards sustainable renewable energy development. Renewable and sustainable energy reviews, 69, 596-609.

Massam, B. H. (1988). Multi-criteria decision making (MCDM) techniques in planning. Progress in planning, 30, 1-84.

Sharma, S. N., Dehalwar, K., & Singh, J. (2023). Cellular Automata Model for Smart Urban Growth Management.

Taherdoost, H., & Madanchian, M. (2023). Multi-criteria decision making (MCDM) methods and concepts. Encyclopedia, 3(1), 77-87.

Introduction to Delphi Research Technique

By Shashikant Nishant Sharma

Delphi research is a methodical and structured communication technique, originally developed as a systematic, interactive forecasting method which relies on a panel of experts. The Delphi method is widely used in various research fields including health, education, and social sciences, aiming to achieve convergence of opinion on a specific real-world issue. The essence of the method lies in a series of rounds of questionnaires sent to a panel of selected experts. Responses are collected and aggregated after each round, and anonymized results are shared with the panel until consensus is reached, or the returns diminish marginally.

Step-by-Step Guide to Conducting Delphi Research

Step 1: Define the Problem and Research Questions

The first step in Delphi research is to clearly define the problem and establish specific research questions that need answering. This involves identifying the key issues at hand and formulating questions that are specific, measurable, and suitable for expert interrogation. It is crucial that the problem is framed in a way that harnesses the experts’ knowledge effectively.

Step 2: Choose a Facilitator

A neutral facilitator, often a researcher, is responsible for designing the study, choosing participants, distributing questionnaires, and synthesizing the responses. The facilitator must possess good communication skills and be capable of summarizing information in an unbiased manner.

Step 3: Select the Panel of Experts

The quality of the Delphi study heavily depends on the panel selected. Experts should be chosen based on their knowledge, experience, and expertise related to the topic. The panel size can vary but typically ranges from 10 to 50 members. Diversity in panel composition can enrich the results, bringing in multiple perspectives.

Step 4: Develop and Send the First Round Questionnaire

The initial questionnaire should gather basic information on the issue and understand the perspectives of the experts. Open-ended questions are useful at this stage to capture a wide range of ideas and insights. The questionnaire should be clear and concise to avoid misinterpretation.

Step 5: Analyze Responses

After the first round, responses are collected and analyzed. The facilitator plays a key role in summarizing these responses, identifying areas of agreement and divergence. This summary is crucial as it forms the basis for subsequent rounds.

Step 6: Iterative Rounds

Based on the summary of the first round, subsequent questionnaires are crafted to delve deeper into the topic, focusing on areas where consensus was not achieved. These rounds are more structured and often use scaled questions to measure the level of agreement or the ranking of priorities. The process is repeated, with each round refining and narrowing down the scope of inquiry based on the latest set of responses.

Step 7: Reach Consensus

The Delphi process continues until a consensus is reached or when additional rounds no longer provide significant changes in responses. It’s important to define what constitutes a “consensus” in the context of the study, which can be a certain percentage agreement among the experts.

Step 8: Report the Findings

The final step involves compiling the findings into a comprehensive report that outlines the consensus achieved, differences in opinions, the methodology used, and the implications of the findings. The report should be clear and detailed to allow for further academic scrutiny or practical application.

Tips for Effective Delphi Research

  • Preparation is Key: Spend adequate time designing the study and formulating the questionnaire.
  • Maintain Anonymity: Anonymity helps prevent the dominance of certain opinions and reduces the bandwagon effect.
  • Feedback: Regular and clear feedback between rounds helps inform the experts of the group’s progress and encourages thoughtful responses.
  • Patience and Persistence: Delphi studies can be time-consuming, and maintaining engagement from all participants throughout the rounds can be challenging but is crucial for the richness of the data.

Conclusion

Delphi research is a powerful tool for harnessing expert opinion and fostering a deep understanding of complex issues. By following a structured and systematic process, researchers can effectively manage the complexities of group communications and make informed predictions or decisions in their fields of study.

References

Balasubramanian, R., & Agarwal, D. (2012). Delphi technique–a review. International Journal of Public Health Dentistry, 3(2), 16-26.

Dehalwar, K., & Sharma, S. N. (2023). Fundamentals of Research Writing and Uses of Research Methodologies. Edupedia Publications Pvt Ltd.

Green, R. A. (2014). The Delphi technique in educational research. Sage Open, 4(2), 2158244014529773.

Hasson, F., Keeney, S., & McKenna, H. (2000). Research guidelines for the Delphi survey technique. Journal of advanced nursing, 32(4), 1008-1015.

Hasson, F., & Keeney, S. (2011). Enhancing rigour in the Delphi technique research. Technological forecasting and social change, 78(9), 1695-1704.

Jain, Sarika, Kavita Dehalwar, and Shashikant Nishant Sharma. “Explanation of Delphi research method and expert opinion surveys.” Think India 27, no. 4 (2024): 37-48.

Keeney, S., Hasson, F., & McKenna, H. P. (2001). A critical review of the Delphi technique as a research methodology for nursing. International journal of nursing studies, 38(2), 195-200.

Ogbeifun, E., Agwa-Ejon, J., Mbohwa, C., & Pretorius, J. H. (2016). The Delphi technique: A credible research methodology.

Williams, P. L., & Webb, C. (1994). The Delphi technique: a methodological discussion. Journal of advanced nursing, 19(1), 180-186.

JUST DECIDE !

The most difficult task to do , is probably making a decision . Now , we are afraid to make decisions as we are worried about it’s consequences . The whole process of deciding is an ordeal .We become indecisive . But indecision is also a decision . Here are a few ways to stop being indecisive ;

THERE NO WRONG OR RIGHT CHOICE – The main reason why we are so miserably indecisive , is because of us labelling our choices as good or bad . We are so afraid to make a wrong choice that it makes it impossible for us to make a decision as we fear our ‘wrong ‘ choices will have lethal consequences . But the truth is , there is no wrong choice . We make decisions in accordance to the level of information available to us at that particular place and time.All we need to do is , re programme our brains into thinking that each decision that we make , will be give us valuable lessons to learn form . This can seriously help us become more decisive .

TAKE YOUR TIME – When required to make a decision , we must take our time to do so . It is often believed that decisiveness means taking quick decisions , but thinking a decision through is really important . While making a decision we must take time to analyse it . So , take your time .

DON’T OVERTHINK IT -Another reason why we find it difficult to make decisions is our overthinking it’s consequences . We keep thinking about all the possible outcomes of our decisions without realising how unpredictable the future is , and that there is no point pondering about it . Just confidently make a decision and know that it will all make sense in the end .

DO WHAT SCARES YOU THE MOST – While making a decision , you must go for the one that scares you the most . If you don’t take the leap of faith , and get out of your comfort zone , you won’t grow . So if something scares you , take that as a good sign and choose that to get the best outcomes .

THE ALCHEMIST

Book : The Alchemist
Original Title : O Alquimista (Portuguese)
Author : Paulo Coelho
Publisher : HarperCollins Publishers LLC
Genre : Quest, Adventure, Fantasy

The majority of the people we see are members of a community. In a dynamic and traditional world, When we’re together, when we look around, we notice that most people are doing similar things, even though their priorities are different. However, if we come across someone who matches our criteria when searching, someone who dares to be different, someone who pays attention to their surroundings. I believe we have found the most courageous among us.

The Alchemist is a mystical fable about the importance of pursuing one’s dreams. The tale of a young shepherd boy who longs to travel and discover a secret that no one else has ever found is wonderfully told by the poet. He continued on his search for the lost treasure in the pyramids. He learned a lot on his journey, read a lot of books, battled with those who got in his way, survived the mighty desert, and finally realised that a person’s treasure is where his heart is. He discovered that it is our decisions, not destiny, that determine what happens to us.

The path to find the treasure is jam-packed with life lessons. Paulo Coelho’s – The Alchemist – became an international bestseller after being translated into 56 languages and selling over 43 million copies worldwide. This book teaches us that we are the masters of our own destiny and captains of our own dreams. It’s a must-read for anyone who has ever doubted themselves. So, if you just pick up one book during the lockdown, make it this one.

Why read ‘Predictably Irrational’?

Why there will never be a cure for irrationality

In this meticulously researched work from acclaimed Professor Dan Ariely, the author dives into the chasm of human psyche and carefully articulates even the most trivial archetypal decisions that we consciously and unconsciously make in our lives. The book starts off with the author describing a personal tragedy where an explosion left 70 percent of his body with third degree burns that left him immobilized. The victim was then subjected to an excruciating three-year period of hospitalisation and excessive dependency on nurses. The trivial yet significant observation of the methods that were used to remove burn bandages in a way that minimises the amount of misery inflicted upon the victims, led the author to further his research on psychology and behavioural economics.

 In each chapter, the author describes the general decision making rigamarole that our psyche seems to follow and then he backs these claims with ground-breaking experiments and logic. The first part of the book concentrates on how we have a comparison bias while we evaluate, judge or make decisions. As an ambitious college student- I, unfortunately, can relate to this. An 8.5 CGPA seems trivial if it’s surrounded by a dozen 9 CGPA’s. This phenomenon of viewing things relatively has been analysed and understood by the market forces. Salesmen and prominent websites prey on this psychological bias to make profits.

I have always wondered how economists arrive at accurate supply and demand statistics and about the factors that should be taken into consideration. The author does a marvellous job in explaining how psychological factors play a major role in the economic decisions made by us and why apart from external factors (price, income etc), psychological factors should be also taken into consideration while predicting market fluctuations or any data of that sort. One of the most interesting and shocking part of the book was the “cost of zero cost” experiment. Apparently, people would rather receive a 10$ gift card for free than paying 7$ for a 20$ gift card. The author personally conducts this experiment at a mall in Boston. The explanation for this irrational phenomenon is conveyed coherently.

The author then shifts focus to some intricate and personal areas of decision making. He addresses questions such as “Why we can’t we make ourselves do what we want to do?” and “why we overvalue what we have?” and then presents the observations of his experiments.

Throughout the book, the reader is asked perplexing questions about various decisions they make which forces them to scratch their heads, following which the rational and irrational answers (observations) are conveyed in a sound and profound manner. I felt that one of the most interesting and perspective-changing parts of the book was when the author accentuates the effects of cost on the psychological and physiological forces of our body. The knowledge of the cost of a commodity shapes our psychological perception towards it- which results in a manipulative physiological response. The author elegantly unravels the reason why a 50-Cent Aspirin can do what a penny’s worth of Aspirin can’t in an experiment he conducts.

In the last part of the book, the author attempts to undertake the courageous journey of deciphering the context of the human character. He tries to analyse the human quality of honesty- What is honesty? Why are people dishonest? What can we do about it? – These are some of the questions he attempts to address. The relevance of these questions and its importance is underestimated in the financial sector. 600 Billion dollars’ worth of thefts and frauds are committed every year in various organisations, claims the author. Furthermore, the reader is clued in about the ever interesting and mind-boggling realm of behavioural economics- The hidden forces that shape our decisions are acutely outlined.

Overall the book is an amalgamation of rigorous research, profound wisdom, intricate questions, ground-breaking experiments, astounding observations and a tinge of humour as only Professor Ariely can provide. It is a must read for anyone who is interested in human psychology and behavioural sciences.

Decision Making 101: Opportunity Cost

How we make choices | TED Talks

Wherever we are and whatever we are doing currently, is the result of the decisions we have made in the past. You have chosen to read this article and not scroll past it or do something else like watching TV or taking a nap. You have consciously made a choice from an array of options that were in front of you. Opportunity cost is the loss of benefits that could be derived from the next best alternative once a choice has been made. By reading this article, you have forgone the pleasure that could have been derived from watching TV or energy that you’d have got from taking a nap.

Opportunity cost is a term in economics but it can be applied to almost every aspect of life and not just the things that can be measured in monetary terms. When an investor chooses to invest his money in a particular stock, the opportunity cost is the return on investment that he could have enjoyed if invested in a different stock. If that investor had an excess amount of funds, he could have invested in both the stocks but that sets things like money, time and even opportunities apart – they are limited. This elucidates the importance of making well thought out decisions.

People who are doing 9 to 5, 5-days a week jobs face difficulty in realising their opportunity costs because they have a fixed schedule and only do what they are told to. They barely make any decisions on their own and just do what their boss tells them to on a regular basis so when they finally see an opportunity to relax on weekend, they don’t look for alternatives and just go with the flow. In case of freelancers or businessmen, however, these people are much more conscious of what they lose when they decide to spend their limited resources in a particular activity. A tailor can easily sacrifice the amount of business he is sacrificing when he decides to go on a week long vacation.

Opportunity cost is everywhere and in everything we do. When a person with a job decides to party on saturday night and sleep in because it’s sunday, he gives up on the time that he could have spent with his family. When you decide to get an MBA from a named university and pay a hefty tuition fee for the same, you sacrifice not just the money but the time, 2 years in this case, that could have been spent in doing a job or learning a different skill. You still chose to go for an MBA and the reason could be because you can get a much better job that pays better than the one without an MBA. Basically, It is all about weighing your alternatives correctly and carefully.

Decision making process isn’t complicated but two of the most crucial steps are identification of alternatives, followed by thorough examination of each alternative. All the benefits that are derived from all the alternatives need to be compared and the one that seems the most satisfactory should be chosen. One can also weigh his options on the basis of what he would regret sacrificing the most.