James J. H. Liou (2013): New concepts and trends of MCDM for tomorrow –in honor of Professor Gwo-Hshiung Tzeng on the occasion of his 70th birthday, Technological and Economic Development of Economy, 19:2, 367-375

To link to this article: http://dx.doi.org/10.3846/20294913.2013.811037
New concepts and trends of MCDM for tomorrow ¾ in honor of Professor Gwo-Hshiung Tzeng on the occasion of his 70th birthday
 
James J.H. Liou

Department of Industrial Engineering and Management,
National Taipei University of Technology,
No. 1, Section 3, Chung-Hsiao East Road, Taipei, Taiwan


     This article introduces several new concepts and trends in multiple criteria decision making (MCDM) for solving actual problems, as proposed by Professor Gwo-Hshiung Tzeng. These new concepts are as follows: (1) interdependency in real-world problems; (2) replacing the relative good solution from the existing alternatives using aspiration levels; (3) shifting from ranking and selection to performance improvement; (4) information fusion/aggregation; and (5) changeable decision spaces. To honor Prof. Tzeng’s contribution in the MCDM field and to commemorate his 70th birthday, this article also highlights his research career in MCDM and some publication list in the past 10 years.
 
Keywords: MCDM, MADM, MODM, DEMATEL, DANP, VIKOR, Changeable space, Aspiration level


1. New trends and concepts in MCDM

    Over the past two decades, the development of information technology (IT) has been characterized by a series of positive, but temporary, shocks. The alternate perspective is that IT in Internet communication has produced a fundamental change in the world, leading to a permanent improvement in fast growth-change prospects such as telephone, telegraph, Internet, smart phone, i-phone, i-pad, cloud computing, business, economy, society, and government. What are the prospects for future trends? Which problems will be solved regarding user/customer/societal needs in marketing situations, and how can overall problems in dimensions and criteria be resolved using aspiration levels? The traditional MCDM field ignored some important new concepts and trends and needed several assumptions to solve real-world problems. Therefore, Prof. Tzeng proposed some new concepts for facing tomorrow’s world.

    First, the traditional model assumes that the criteria in value-creation are independent and hierarchical in structure; however, criteria are often interdependent in real-world problems because ‘Some statistics and economics assumptions are unrealistic in the real world’. The Decision Making Trial and Evaluation Laboratory (DEMATEL) technique is an effective tool to find the interrelationship matrix and building an influential network relation map (INRM) for solving relationship problems in the real world. Second, the relatively good solution from existing alternatives is replaced by aspiration levels to avoid “Choosing the best among inferior options/alternatives”, i.e. “Picking the best apple among a barrel of rotten apples”.
Third, the emphasis in the field has shifted from ranking and selection when determining the most preferable approaches to performance improvement of existing methods based on INRM because “we need a systematic approach to problem-solving; instead of addressing the systems of the problem, we need to identify the sources of the problem”. Fourth, Kahneman and Tversky (Kahneman received the Nobel Prize in Economics in 2002) developed the basic concept of the non-additive (or super-additive) value-function aggregation in multi-criteria problems in 1973. Simon incorporated the basic concept of the “aspiration level” in his work, receiving the Nobel Prize in Economics in 1978. The question that arises is “How can we implement these two concepts (non-additive value function and aspiration level) within real-world inter-relationship (dependence and feedback) problems?” Information fusion or aggregation/integration such as fuzzy integrals (basically, a non-additive or super-additive model) has been developed to aggregate/integrate performances. Therefore, to overcome the defects of the conventional Multiple Attributes Decision Making (MADM) method, a new Hybrid Dynamic Multiple Criteria Decision Making (HDMADM) method has been developed for solving complicated and dynamic problems in the real world and application to improve real issues, e.g. Internet communication, government overall policy improvement, etc. Fifth, classical Multiple Objectives Decision Making (MODM) methods are used to pursue an optimal solution in a fixed feasible region (objective space) based on fixed conditions or resources (decision space). A new thinking of MODM models with changeable spaces can help decision-makers reach a win-win for planning/designing and achieve the desired point (aspiration level), which is better than pursuing the ideal point or Pareto optimal solution.