Pareto Optimal Decisions in Multi-Criteria Decision Making Explained with Construction Cost Cases

In multi-criteria decision-making (MCDM) problems the decision-maker is often forced to accept a not ideal solution. If the ideal choice exists, it would be certainly chosen. The acceptance of a non- ideal solution leads to some inadequate properties in the chosen solution. MCDM methods help the decision-maker to structure his needs considering different units, in which the properties of the solutions are expressed. Secondly, with MCDM tools the assessment of the available solutions can be calculated with consideration of the decision-maker's needs. The incorporation of the cost criterion into the decision maker's preferences calculation, and the solution assessment calculation, deprives the decision-maker of the ability to calculate the financial result of the decision he must make. A new multi-criteria decision making with cost criterion analysed at the final stage (MCDM-CCAF) method is developed based on principle of Pareto optimal decisions. It is proposed to exclude the cost criterion from the MCDM analysis and consider it at the final phase of the decision-making process. It is illustrated by example solutions with consideration of cost criterion and without it. It is proposed to apply the invented post-processing method to all MCDM analyses where the cost criterion of analysed variants is considered.

Automated summary

Multi-criteria decision-making methods assist decision makers in structuring needs, evaluating solutions, and deprive the decision maker of the ability to calculate the financial result of the decision.