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760. An Enhanced Simulation-Based Approach for Multicriteria Evaluation Problems

Invited abstract in session MB-47: MCDA applications in Engineering and Management 2, stream Multiple Criteria Decision Analysis.

Monday, 10:30-12:00
Room: 50 (building: 324)

Authors (first author is the speaker)

1. PAPPALARDO MARIA ROSARIA
Department of Economics and Business, University of Catania
2. Silvia Angilella
Department of Economics and Business, Univ of Catania
3. Michalis Doumpos
School of Production Engineering and Management, Technical University of Crete
4. Constantin Zopounidis
Dept. of Production Engineering and Management, Technical University of Crete

Abstract

The sigma-mu efficiency methodology, derived from Stochastic Multi-Attribute Acceptability analysis (SMAA), addresses uncertainty in decision alternatives’ performance by constructing Pareto-Koopmans efficiency frontiers (Greco et al.,2019). These frontiers evaluate alternatives based on expected performance μ and variability σ, across diverse criteria weights.
In this paper, we assess alternatives’ performance by synthesizing the distribution of composite indicator values, incorporating additional parameters beyond μ and σ, namely, skewness and kurtosis. These parameters offer valuable insights into the shape characteristics of the probability distribution of composite indicators, i.e. tailedness and symmetry.
Therefore, in this study, we propose revisiting the SMAA model by adopting
the versatile Dirichlet distribution to the weights of the criteria (Saint-Hilary, et al.,2017; Jia et al.,1998). The Dirichlet distribution, thanks to its flexibility in representing shapes, incorporating prior knowledge, and supporting the simplex, is deemed suitable for modeling weights’ uncertainty without expert elicitation and capturing skewness and kurtosis based on shape parameters α and β.
The proposed approach is employed to evaluate the European Small and Middle-Sized Enterprises' (SMEs) performance from 2018-2022
using financial, qualitative, and ESG criteria, creating a comprehensive composite indicator aligned with the sustainable goals of Agenda 2030.

Keywords

Status: accepted

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