IE 404 – Multiple Criteria Decision Making
Fall 2012-2013
Course Description
This course is designed to cover quantitative decision analysis. The course is mainly divided into
three parts, general introduction to decision analysis, multicriteria decision analysis, and multiobjective optimization. In the first part, how people make decisions and decision making traps
are covered. The merits of a structured rational decision making process are emphasized. In the
second part, the structuring of decision elements (values, objectives, alternatives, measures,
tradeoffs, and uncertainty), multi-attribute utility theory (MAUT) and analytic hierarchy process
(AHP) for decision under certainty, and decision trees for decisions under uncertainty are
introduced. Value-added risk management is also discussed. Finally, in the third part,
optimization and goal programming are discussed.
Instructor
Asst.Prof.Dr. İbrahim AKGÜN
E-mail: iakgun@bilkent.edu.tr
Office Location: EA
Office Hours:
Phone:
Teaching Assistant
Required Textbook
Chelst K, Canbolat YB.Value-Added Decision Making for Managers, CRC Press Taylor and
Francis Group, 2012.
Supplementary Textbook
Kirkwood CW. Strategic Decision Making: Multiobjective Decision Analysis with Spreadsheets,
Duxbury Press, Belmont, CA, 1997.
Recommended Textbooks
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Goodwin P, Wright G. Decision Analysis for Management Judgment, John Wiley&Sons, 4
th Edition, 2010.
Clemen RT, Reilly T. Making Hard Decisions with Decision Tools, Southwestern Cengage
Learning, 2001.
Keeney, R.L., and Raiffa, H., Decisions With Multiple Objectives: Preferences and Value
Trade-offs, John Wiley&Sons, New York, 1976.
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Belton V, Stewart TJ. Multiple Criteria Decision Analysis: An Integrated Approach, Kluwer
Academic Publishers, Dordrecht, 2003.
Bazerman MH. Judgment in Managerial Decision Making. 5th Ed., John Wiley & Sons, New
York, 2002.
Doumpos M, Zopounidis C. Multicriteria Decision Aid Classification Methods, Kluwer
Academic Publishers, Dordrecht, 2002.
French S. Decision Theory: An Introduction to the Mathematics of Rationality, Ellis
Horwood Limited and John Wiley&Sons, New York, 1988. [Excellent Textbook]
Watson SR, Buede, Dennis M., Decision Synthesis: The Principles and Practice of Decision
Analysis, Cambridge University Press, NY, NY, 1987.
Zeeleny, M., Multiple Criteria Decision Making, McGraw-Hill, New York, 1982.
Hammond JS, Keeney RL, Raiffa H. Smart Choices. Harvard Business School Press,
Boston, 1999.
Saaty TL. Multicriteria Decision Making: the Analytic Hierarchy Process, RWS
Publications, Pittsburgh, 1990.
Winston WL. Operations Research: Applications and Algorithms, Duxbury Press,
Wadsworth Inc., Belmont, USA, 2004.
Chankong V, Haimes, YY. Multiobjective Decision Making: Theory and Methodology,
North-Holland, 1983.
Tabucanon, MT. Multiple Criteria Decision Making in Industry, Elsevier, 1988.
Cohon JL. Multiobjective Programming and Planning, Academic Press, 1978.
Course Schedule
Thursday 10:40-13:30 (L 111)
Course Website
http://ie404.cankaya.edu.tr/
Announcements and course related material (e.g., lecture notes and homework
assignments) will be posted on the web. Students are responsible to regularly check the
website and not miss any activity/information.
Grading
Mid-term Exam
Final Exam
Homework
Application Presentation
Attendance and Class Participation
25 %
40 %
20 %
10%
5%
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Course Outline
Please note that the schedule provided below is tentative, and the instructor reserves the right to
make any necessary changes.
Wk
Dates
1 27 Sep
2
3
4 Oct
11 Oct
4
5
6
7
18 Oct
25 Oct-No classes
Will be rescheduled
1 Nov
8 Nov
8
9
10
15 Nov
22 Nov
29 Nov
11
12
6 Dec
13 Dec
13
20 Dec
14
15
27 Dec
3 Jan
Topics Covered
Introduction, Decision Traps
Decision Traps
Structure Decisions with Multiple Objectives
Influence Diagrams
Structure Decisions with Multiple Objectives
Multi-Attribute Utility Theory
Multi-Attribute Utility Theory
Multi-Attribute Utility Theory, Sensitivity
Analysis
Analytic Hierarchy Process
Analytic Hierarchy Process (cont’d)
Midterm Exam,
Value-Added Risk Management Framework and
Strategies
Decisions with Uncertainty: Decision Trees
Structured Risk Management and Value of
Information; Risk Attitued
Multiobjective Optimization
Vector Optimization
Goal Programming
Group Decision Making
Reading*
Ch.1,12,13,
Handout
Ch.1,12,13
Ch 3, Ch 4
Ch 4
Ch 5
Ch 5
Ch 5, 6
Ch.7
Ch 7
Ch 8
Ch 10
Ch 11, 12
* All readings listed here are from the required textbook. Any other supplementary material will
be announced in class.
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