Evaluation of Technology using TOPSIS in Presence of Multi-collinearity in Attributes: Why use the Mahalanobis distance?

Abstract

This paper validates mathematically an improvement to the multi-criteria technique TOPSIS, (Technique for Order of Preference by Similarity to Ideal Solution) which traditionally uses the Euclidean distance when evaluating a set of alternatives, and assumes that there is independence between the attributes of the alternatives being evaluated, condition that is not always true. This paper demonstrates how the Mahalanobis distance incorporates the linear dependence between the alternative’s attributes, and also presents two cases of study in which evaluations are performed with both distances, finding differences in proposed solutions.

Keywords

• multi-attribute techniques
• Technology for Advance Manufacturing (TAM) investment
• TOPSIS
• Euclidean distance
• Mahalanobis distance