Multi-Criteria analysis

Definition

Multi-Criteria Analysis (MCA) is a method aimed at supporting decision makers who are faced with making numerous and conflicting evaluations. MCA aims at highlighting these conflicts and deriving a way to come to a compromise in a transparent process.

Context

It involves judging the expected performance of each option against a number of criteria or objectives. These techniques can deal with complex situations, involving uncertainty as well as the preferences of many stakeholders. This is particularly highlighted when the problem presents conflicting objectives and when these objectives cannot be easily expressed in monetary terms.

Example of a MCA performance matrix

Methodology

The essence of MCA lies in the preparation of a performance matrix with several rows and columns in which each row describes one of the objectives or performance dimensions and each column describes one option. Thereafter, scores for each option with respect to each objective are assigned. These scores are supposed to represent performance indicators and may range on a scale from -5 to +5.

Depending on the final goal of an analysis (application), MCA techniques might have as result a most preferred option, a ranked list of all options, a short-list with a limited number of options, or just a separation between acceptable and unacceptable options.

In the more sophisticated versions of MCA, weights are assigned to each objective. Thereafter, a weighted average of scores is worked out. This average provides the overall indicator of performance of each option. The higher the weighted average of scores, the better the option. The size of the matrix can be increased to take care of a large number of criteria as well as options. It is a physical method based on numerical rating and scaling of various environmental and societal impacts. As such, the difficulties faced in quantification in monetary terms are avoided.


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Economic aspects

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Economic aspects
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Multi-Criteria analysis