MIE 686 Course Description

TITLE: Multi–Criteria Decision Making & Decision Analysis

INSTRUCTOR: James MacGregor Smith
1. DESCRIPTION:
One of the most important, exciting and influential topics in Industrial Engineer-
ing and Operations Research has emerged as the field of Multi–Criteria Decision Making
(MCDM). Both from a theoretical and practical perspective, MCDM influences all as-
pects of engineering design and operational analysis. We will survey and examine in some
detail the following issues, topics and algorithmic techniques of MCDM:

◦ Values, Objectives, Attributes and Criteria

◦ Elementary Decision Analysis/ Decision Trees
◦ Deterministic and Expected Utility Theory
◦ Vector Optimization Theory
◦ Multi-Attribute Value Systems
◦ Attribute Ranking Methods
◦ Solution Generating Methods
◦ Global Preference Methods
◦ Goal Programming Methods
◦ Interactive Trade-Off Methods
◦ Group Decision Making Methods

All of the above will be demonstrated in class and coupled with available personal
computer programs when appropriate.
2. REQUIREMENTS:
Homeworks, midterm, final exam, and term project are required by all students. Home-
work will account for 25% of your grade, the midterm and final exam and term project
will each be worth 25% to round out your total grade.
3. PREREQUISITES:
Graduate standing or consent of the instructor. Knowledge of linear algebra and linear
programming (M IE 379 or 620 or equivalent) and probability and statistics (MIE 273
Math 520) is highly recommended .
4.TEXT and REFERENCES:
There are two textbooks required (paperbacks) Keeney, R. and H. Raiffa Decisions
with Multiple Objectives. Wiley, 1976. Cohon, J.L. Multiobjective Programming and Plan-
ning. Academic Press, 1978 (Dover re-issue, paperback). Classrooms notes, journal articles
and assorted reports. Various other references are on reserve in the Graduate Physical
Science Library.

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 MIE 686 Tentative Lecture Outline
I. Introduction
◦ MCDM Overview
◦ Basic Foundations and Pareto Optimality
◦ Elementary Decision Analysis
◦ Decision Trees& Influence Diagrams
II. Multi–Attribute Decision Making (MADM)
◦ Deterministic Utility Theory
◦ Value Decomposition
◦ Additive Value Decomposition
◦ Multi–Facility Location Analysis
◦ Expected Utility Theory
◦ Single Attribute Utility Functions
◦ Multi–Attribute Overview
◦ Two–Attribute Utility Models
◦ Multi–Attribute Computer Programs
◦ Multi–Attribute Assessment
III. Multi–Objective Decision Making (MODM)

◦ Vector Optimization Theory

◦ Weighting Methods
◦ Weighting Example
◦ Linear Vector Optimization (LVOP)
◦ Parametric Decomposition
◦ LVOP Algorithm
◦ LVOP Example
IV. Noninteractive and Interactive Methods
◦ Geoffrion’s Bi–Criterion Method
◦ Linear Goal Programming
◦ Nonlinear and Integer Goal Programming
V. Interactive Trade–Off Methods
◦ Zionts–Wallenius
◦ Surrogate Worth
◦ Group Decision Making Methods

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 MIE 686 Reference Bibliography

Churchman C.W., R.L. Ackoff and E.L. Arnoff. Introduction of Operations Research.
Wiley, 1957.
Clemen, R.T. Making Hard Decisons: An Introduction to Decision Analysis. PWS-
Kent Publishing Co., 1990.
Cohon, J.L. * Multiobjective Programming and Planning. Academic Press, 1978.
Ehrgott, Matthias. Multicriteria Optimization. 1st. ed. Springer-Verlag, (2000).
Fandel, G. and T. Gal. Multiple Criteria Decision Making Theory and Application.
Springer–Verlag, 1980, 1997.
Goicochea, A., D.R. Hansen and L. Duckstein. Multiobjective Decision Analysis with
Engineering and Business Application. Wiley, 1982.
Hwang, C.L. and A. Masud. Multiple Objective Decision Making – Methods and
Applications. Springer–Verlag, 1979.
Hwang, C.L. and K. Yoon. Multiple Attribute Decision Making. Springer–Verlag, 1981.
Ignizio, J.P. Goal Programming and Extensions. Lexington Books, 1976.
Keeney, R.L. and H. Raiffa. ** Decisions with Multiple Objectives. Wiley, 1976.
Lee, S.M. Goal Programming for Decision Analysis. Auerback Publishers, 1972.
Raiffa, H. Decision Analysis Addison-Wesley, 1968.
Starr, M.K. and M. Zeleny. Multiple Criteria Decision Making. TIMS Studies in Man-
agement Sciences, Vol. 6, North–Holland, 1977.
Steuer, R.E. Multiple Criteria Optimization: Theory, Computation, and Application.
Wiley, 1986.
Von Neumann, J. and O. Morgenstern. Theory of Games and Economic Behavior.
Wiley, 1974.
Zeleny, M. Multiple Criteria Decision Making. Mc–Graw Hill, 1982.

* Required as a reference in the Text Book annex/Amazon

** Required as a reference in the Text Book annex/Amazon