Project portfolio selection using fuzzy AHP and VIKOR techniques

Abstract

This paper deals with the problem of project portfolio selection by using fuzzy AHP and VIKOR techniques. Project portfolio selection for making decisions on investment is a critical decision in many companies and organizations. This selection is a sophisticated and muticriteria problem, due to miscellaneous criteria which are often in conflicting with each other. The authors define six criteria for selecting the optimal project as cost criteria (risk, payback period) and benefit criteria (Profitability, consistent with corporate goals and objectives, flexibility, and sustainability). On the other, project portfolio selection problem is often influenced by uncertainty in practice; also because of the uncertainty associated with imprecision, loss of information and lack of understanding. In this paper, the implementation of an organized framework for project portfolio selection has discussed through the proposed model base on fuzzy analytical hierarchy process (FAHP) and VIKOR techniques using linguistic terms in order to calculate the importance weights of evaluation criteria and rank the feasible projects in descending order respectively. To show the potential applications of the methodology, the proposed method is used for a real world case study.