Risk Assessment: framework for combining CBA and MCDA
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| − | This article aims to set a framework for the Decision Support System (DSS) of projects/portfolios, through the combination of the traditional Cost-Benefit Analysis (CBA) and the more recent Multi-Criteria Decision Analysis (MCDA). Thus, the scope is to provide decison makers a tool that considers monetary goals (e.g., construction costs,NPV, BCR), as also non-monetary strategic goals (e.g., environmental sustainability, social development). | + | This article aims to set a framework for the '''Decision Support System (DSS) of projects/portfolios''', through the '''combination of the traditional Cost-Benefit Analysis (CBA) and the more recent Multi-Criteria Decision Analysis (MCDA)'''. Thus, the scope is to provide decison makers a tool that considers monetary goals (e.g., construction costs,NPV, BCR), as also non-monetary strategic goals (e.g., environmental sustainability, social development). |
| + | This process assumes that the first step of the appraisal, the CBA part, has already been completed, since the method is widely spread and used by the majority of the companies. | ||
The article will also consider the limitations of this framework, in particular during the MCDA assessment, providing suggestions to mitigate the difficulties related to the weighting profile and criteria weighting, and to facilitate the decision makers during the process of project/portfolio appraisal . | The article will also consider the limitations of this framework, in particular during the MCDA assessment, providing suggestions to mitigate the difficulties related to the weighting profile and criteria weighting, and to facilitate the decision makers during the process of project/portfolio appraisal . | ||
| − | In order to provide an effective and appliable tool for the reader, this article will focus on the application of the REMBRANDT technique during the MCDA, and then on the COSIMA approach, used to combine the results from CBA and MCDA. | + | In order to provide an effective and appliable tool for the reader, this article will focus on the application of the '''REMBRANDT technique''' during the MCDA |
| + | , and then on the '''COSIMA approach''', used to '''combine the results from CBA and MCDA.''' | ||
| + | |||
| + | __TOC__ | ||
| + | |||
| + | == Introduction == | ||
| + | |||
| + | === CBA === | ||
| + | Characteristics of the CBA analysis | ||
| + | === MCDA === | ||
| + | Characteristics of the MCDA analysis | ||
| + | == Application == | ||
| + | === REMBRANDT technique === | ||
| + | Description of the tool and its main features | ||
| + | ==== Steps ==== | ||
| + | ===== Criteria selection ===== | ||
| + | ===== Alternatives and Criteria comparisons ===== | ||
| + | ===== Eliciting Weights ===== | ||
| + | ===== Consistency analysis ===== | ||
| + | ===== Sensitivity analysis ===== | ||
| + | === COSIMA approach === | ||
| + | Overall application method, shadow prices and alpha percentage | ||
| + | ==== Steps ==== | ||
| + | ===== Inputs from CBA ===== | ||
| + | ===== Inputs from REMBRANDT and value function scoring ===== | ||
| + | ===== MCDA% and calculation of shadow prices ===== | ||
| + | ===== Determination of the TRR ===== | ||
| + | ===== Comparison of the different porjects/alternatives basing on the MCDA% ===== | ||
| + | == Limitations == | ||
| + | === Weights and Pair-wise comparison rankings === | ||
| + | == Suggestions == | ||
| + | == Annotated bibliography == | ||
| + | == References == | ||
Revision as of 22:53, 10 February 2022
This article aims to set a framework for the Decision Support System (DSS) of projects/portfolios, through the combination of the traditional Cost-Benefit Analysis (CBA) and the more recent Multi-Criteria Decision Analysis (MCDA). Thus, the scope is to provide decison makers a tool that considers monetary goals (e.g., construction costs,NPV, BCR), as also non-monetary strategic goals (e.g., environmental sustainability, social development). This process assumes that the first step of the appraisal, the CBA part, has already been completed, since the method is widely spread and used by the majority of the companies. The article will also consider the limitations of this framework, in particular during the MCDA assessment, providing suggestions to mitigate the difficulties related to the weighting profile and criteria weighting, and to facilitate the decision makers during the process of project/portfolio appraisal . In order to provide an effective and appliable tool for the reader, this article will focus on the application of the REMBRANDT technique during the MCDA , and then on the COSIMA approach, used to combine the results from CBA and MCDA.
Contents |
Introduction
CBA
Characteristics of the CBA analysis
MCDA
Characteristics of the MCDA analysis
Application
REMBRANDT technique
Description of the tool and its main features
Steps
Criteria selection
Alternatives and Criteria comparisons
Eliciting Weights
Consistency analysis
Sensitivity analysis
COSIMA approach
Overall application method, shadow prices and alpha percentage
