An Alternative Sensitivity Analysis for the Evaluation of MCDA Applications: The Significance of Brand Value in the Comparative Financial Performance Analysis of BIST High-End Companies

Abstract

Multi-criteria decision analysis (MCDA) applications consist of techniques that enable the decision maker to make clearer decisions in scenarios where there is more than one alternative and criterion. The general approach for sensitivity analysis in MCDA applications implies sensitivity to the weight coefficient. In this study, as an alternative approach, we reinterpret sensitivity by using the statistical relationship between the final ranking produced by an MCDA method and a constant external factor. Thus, we both verify through an anchor and reveal to what extent the change in the weight coefficient changes the external relations of MCDA. The motivation for this study is to propose an alternative sensitivity methodology. On the other hand, brand value is a parameter that contains critical information about the future of the company, which has not integrated into financial performance studies made with MCDAs before. To that end, the financial performance of 31 companies with the highest brand value in Turkey and trading on Borsa Istanbul between 2013 and 2022 was analyzed with seven different MCDA applications via integrating brand value into the criteria for the first time. The study’s findings revealed that the proposed innovative sensitivity tests produced similarly robust results as traditional tests. In addition, brand value has been proved to be an advantageous criterion to be implemented into MCDAs for financial performance problems through the sensitivity analysis made.

Interpreting the Determinants of Sensitivity in MCDM Methods with a New Perspective: An Application on E-Scooter Selection with the PROBID Method

“…Here, the sensitivity analysis of MCDM's final results can be easily observed with the price constant. We can see this approach with a similar logic in the studies of Elma et al [19] and Baydaş et al [20]. In these studies, financial performance was calculated with MCDM, the direction of the share price and parameter change were determined, and the most appropriate MCDM method was determined and recommended.…”

“…Max normalization, which is commonly used for CODAS, may not give good results sometimes. CODAS-Max incompatibility can be an inefficiency problem, especially for financial data [32,19]. If Table 5 is examined carefully, it will be seen that the low sensitivity/high correlation and high sensitivity/low correlation patterns in PROBID and sPROBID are also present to a certain extent in CODAS for both weighting and normalization techniques.…”

Urban Evaluation of Pedestrian Crossings Based on Start-Up Time Using the MEREC-MARCOS Model

“…In scenarios S18-S20, when the importance of the second criterion relating to the age group of 19-40 drastically decreases, Novi Sad shows the best characteristics because the value of the fourth criterion significantly increases, indicating its superiority compared to other cities. In addition to the described sensitivity analysis, a comparative analysis (Figure 4) was also conducted with six other methods SAW [12], WASPAS [13], AROMAN [14], EDAS [15], MABAC [16] and CRADIS [17].…”

Does the Performance of MCDM Rankings Increase as Sensitivity Decreases? Graphics Card Selection and Pattern Discovery Using the PROBID Method

“…Sensitivity analysis for MCDM is a concept directly related to the degree of impact of a numerical change of an input parameter on the final results [16]. It can be said that measuring the effect of weight coefficient assignment on the sensitivity of the MCDM ranking is the first application that comes to mind in the literature.…”