MADM Models for Decision Making in Acquisitions
Dorin D. M. BANCIU1, Mihaela RESTEANU2
10, Ion Ionescu de la Brad Blvd., 013813, Bucharest, Romania
2 PIRAEUS BANK
63A, Nicolae Caranfil, 014146, Bucharest, Romania
Abstract: In this paper some methodological aspects of taking decisions and the MADM model are brought to the reader’s attention. The model is described in detail and its solving will refer to the Onicescu method. The application developed by the authors is an example of optimal products, services, and works acquisition. The optimization makes use of OPTCHOICE – pervasive software for MADM modeling and optimal choice problems solving.
Keywords: Decision Making, Multiple Attribute Decision Making, Assessment and Optimization, Acquisitions, Ruttier Transport.
CITE THIS PAPER AS:
Dorin D. M. BANCIU, Mihaela RESTEANU, MADM Models for Decision Making in Acquisitions, Studies in Informatics and Control, ISSN 1220-1766, vol. 20(3), pp. 313-324, 2011. https://doi.org/10.24846/v20i3y201112
Decision making is a set of human activities, which, in essence, means being aware that there are several ways of acting in a given context, analyse their consequences in relation to a purpose, choice and implementation of the action considered to be optimal in an axiological vision adopted.
The main stages of this process are the following:
- Triggering, characterized by the realising the necessity to act in response to the occurrence of events bearing disturbance / aggression / changes / gains / losses / opportunities / etc.;
- Decisional tension, defined by the collective concern, most often instinctive and unconcerted, to perceive, even inaccurate or incomplete, the decisional problem caused by the triggering events;
- Initial formulation of the decisional problem, highlighted in slightly different informal versions, depending on the views of different actors involved in the decision, between whom the first conflicts of opinion may arise;
- Enunciation of the formal decisional problem, built through organized effort by the multitude of actors which are structured by harmoniously assigning official roles (decision makers, experts, consultants, executioners, etc.).
- Solving of the formal decisional problem, assuming the application of one or more methods able of providing alternative solutions which are determined by simulating the consequences of their implementation, eventually choosing the one considered optimal;
- Implementation of the optimal decision, following the evaluation of all actions taken in order to achieve the desired results;
- Verification of the decision’s correctness / completeness / optimality, could conclude that the decisional process has been closed or may return to one of the previous stages.
These are general methodological steps in decision making but they occur in a stated paradigm. In the present case, the paradigm is Multiple Attribute Decision Making (MADM) [1, 2 and 3].
It can be stated, without being mistaken, that any formulation of the matter, which seeks choosing of an optimal object in relation to several attributes, according to a process that can be defined through an algorithm leads naturally to a MADM model.
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