A fuzzy decision support system for strategic portfolio management

Portfolio selection for strategic management is a crucial activity in many organizations, and it is concerned with a complex process that involves many decision-making situations. In order to decide which of the proposed projects should be retained in the final project portfolio, numerous conflicting criteria must be considered. They include economic, personnel development, and corporate image. Although there are many studies available to assist decision-makers in doing the process of portfolio selection, there are no integrated frameworks that one can use to systematically do the portfolio selection. In addition, in most decision-making situations, decision-makers have to make decisions with incomplete information and under uncertain circumstances. These situations have been recognized by many researchers as a suitable field to use fuzzy set theory. Therefore, based on the concepts of decision support system (DSS), we developed an integrated framework that incorporates fuzzy theory into strategic portfolio selection. This framework provides managers with a flexible, expandable and interactive DSS to select projects for portfolio management. We used a real-world case to demonstrate the proposed approach. (C) 2003 Elsevier B.V. All rights reserved.