A Multiattribute Optimization Model for Strategic Investment Decisions

Abstract

Strategic investment decisions entail intertemporal resource allocation. Given relative resource availability and favourable environmental dynamics, effective strategic investment planning is a major determinant of overall corporate financial performance. This paper advances a methodology for optimizing intertemporal investment decisions through a consensus‐oriented process. This process entails identifying the strategic investment factors, their relative importance, and their assumed values relevant to the timing of each investment program. The paper also provides a methodology for determining the system's priority formulation as the model's objective function. This information generates an optimization matrix designated by investment programs and time. This matrix is then optimized through a hierarchical goal‐programming model that maximizes overall strategic investment decisions. The model was applied to a major capital investment program in the state of New York. Résumé Les décisions d'investissements stratégiques impliquent une allocation de ressources intertemporelles. étant donné la disponibilité relative des ressources et de bonnes dynamiques environnementales, une planification efficace des investissements stratégiques est le déterminant principal de l'ensemble des résultats financiers d'une entreprise. La présente recherche propose une méthodologie pour optimiser les décisions d'investissements intertemporels au moyen d'un processus orienté vers le consensus (consensus‐oriented). Ce processus comprend tout d'abord l'identification des facteurs d'investissements stratégiques, puis leur importance relative et leur valeur supposée en rapport avec l'échelonnage dans le temps de chaque programme d'investissement. Elle propose également une méthodologie pour déterminer la formulation de la priorité du système ainsi que la fonction objective du modèle. Cette information conduit à la construction d'une matrice d'optimisation par programmes et par temps d'investissement. Cette matrice est ensuite optimisée grǎce à un modèle de programmation à but hiérarchique qui maximise les décisions globales d'investissements stratégiques. Ce modèle à été appliqué à un programme d'investissement en immobilisations dans l'état de New York.

Group Decision Makers' Preferences Modelling within the Goal Programming Model: An Overview and a Typology

“…Wey and Wu () permit the group DMs to express their preference structure with imprecision by using a Fuzzy Delphi Technique. Their model also permits the DMs to account for interdependencies by using the ANP, as was the case in the study by Kooros and McManis (). Although the preference articulation is a priori , the authors suggest that future research should incorporate sensitivity analysis, which would permit progressive articulation.…”

“…The authors suggest the new methodology of combining the Delphi Technique and the EWGP formulation be termed 'Delphic Goal Programming'. Kooros and McManis (1998) propose a model that incorporates WGP and a hierarchical GP formulation. The group DMs' preferences are sought through an expert opinion interview series and are taken into consideration primarily a priori, although the preference articulation could be applied progressively or a posteriori.…”

“…The model was used in strategic investment decisions with respect to capital projects. Kooros and McManis (1998) provide a detailed discussion of the implications of the decision environment on the GDM process. Khorramshahgol (1999) provides an illustration of budget allocations for long-term projects.…”

“…When decision making is applied to the context of group decision making (GDM), individual decision‐making theories still apply, but the interaction of several participants increases the complexity and adds further dimensions to the process. Kooros and McManis () provide a description of a typical GDM process and claim group decisions are ill‐structured, ambiguous, plagued by imperfect information and are typically made by heterogeneous and frequently conflicting groups. These groups are under constraints of time, resources and/or political and organizational pressure.…”

<b>Definição de portifólio de projetos de investimentos em uma empresa usando análise multicriterial – non - traditional capital investiment criteria – e programação linear</b>

“…Porém, na maioria das situações, vários projetos costumam entrar em cogitação ao mesmo tempo. Quando isto acontece, devem ser escolhidos, dentre as várias alternativas, os projetos mais vantajosos, tendo em vista os recursos financeiros existentes ou que podem ser obtidos, além de outros fatores internos e externos à empresa (KOOROS; MCMANIS, 1998).…”