The application of stochastic dominance to sensitivity analysis in quantitative multiple criteria decision making (MCDM-1)

Abstract

The paper considers sensitivity of multicriteria decision making methods based on quantitative measurements and their use in determining effective construction investment projects. The problem of effective construction investments is of paramount importance for a group of people (experts) making a cooperative decision because these investments determine the potential of construction and the structure of expenses. Similar problems also arise in other fields of engineering. The calculation of investments is an expensive tool of enterprise management used in planning the investments. The paper describes the main principles of sensitivity analysis of the initial data, i.e. the significances of the criteria elicited from the survey of experts using quantitative multiple criteria decision methods. Monte Carlo method as well as a particular form of stochastic dominance are also applied and the algorithm and a case study demonstrating the application of the suggested technique are presented.