Modified PROMETHEE Approach for Solving Multi-Criteria Location Problems with Complex Criteria Functions

Abstract

The specific problem that occurs in multi-criteria decision-making (MCDM) processes is ranking a number of alternatives using complex criteria functions (the hierarchical structure of criteria) whose values must consider the impacts of all-important characteristics and parameters of alternatives. The problem becomes more complex by increasing the number of levels of sub-criteria functions (degree of decomposition). This paper proposes an extended procedure based on the mean values conversion of the net outranking flow of sub-criterion functions obtained by modified PROMETHEE methods. The actual value of criterion functions is used only at the last level, and transformed values of the net outranking flow for generating a final rank of alternatives are introduced at other levels. This procedure provides a more objective comparison of the impact of various individual criteria to rank the alternatives and easier making of unique solution, where the impact of decision-maker (DM) experience and subjective estimation is minimised in the selection. Applicability and practicability of the presented procedure for solving the selection problem of a logistics warehouse location are demonstrated in the analysis of a case study example.

Keywords

• criterion function
• decision-making
• location problem
• multi-criteria optimization
• PROMETHEE