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Baseline value specification and sensitivity analysis in multiattribute project portfolio selection

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  • Liesiö, Juuso
  • Punkka, Antti

Abstract

A key issue in applying multi-attribute project portfolio models is specifying the baseline value – a parameter which defines how valuable not implementing a project is relative to the range of possible project values. In this paper we present novel baseline value specification techniques which admit incomplete preference statements and, unlike existing techniques, make it possible to model problems where the decision maker would prefer to implement a project with the least preferred performance level in each attribute. Furthermore, we develop computational methods for identifying the optimal portfolios and the value-to-cost -based project rankings for all baseline values. We also show how these results can be used to (i) analyze how sensitive project and portfolio decision recommendations are to variations in the baseline value and (ii) provide project decision recommendations in a situation where only incomplete information about the baseline value is available.

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  • Liesiö, Juuso & Punkka, Antti, 2014. "Baseline value specification and sensitivity analysis in multiattribute project portfolio selection," European Journal of Operational Research, Elsevier, vol. 237(3), pages 946-956.
    • Handle: RePEc:eee:ejores:v:237:y:2014:i:3:p:946-956
    DOI: 10.1016/j.ejor.2014.02.009
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    Cited by:

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    2. Liesiö, Juuso & Kee, Taeyoung & Malo, Pekka, 2024. "Modeling project interactions in multiattribute portfolio decision analysis: Axiomatic foundations and practical implications," European Journal of Operational Research, Elsevier, vol. 316(3), pages 988-1000.
    3. Kajal Chatterjee & Sheikh Ahmed Hossain & Samarjit Kar, 2018. "Prioritization of project proposals in portfolio management using fuzzy AHP," OPSEARCH, Springer;Operational Research Society of India, vol. 55(2), pages 478-501, June.
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    5. Morton, Alec, 2015. "Measurement issues in the evaluation of projects in a project portfolio," European Journal of Operational Research, Elsevier, vol. 245(3), pages 789-796.
    6. Salo, Ahti & Doumpos, Michalis & Liesiö, Juuso & Zopounidis, Constantin, 2024. "Fifty years of portfolio optimization," European Journal of Operational Research, Elsevier, vol. 318(1), pages 1-18.
    7. Fliedner, Thomas & Liesiö, Juuso, 2016. "Adjustable robustness for multi-attribute project portfolio selection," European Journal of Operational Research, Elsevier, vol. 252(3), pages 931-946.
    8. Ran Etgar & Yuval Cohen, 2022. "Roadmap Optimization: Multi-Annual Project Portfolio Selection Method," Mathematics, MDPI, vol. 10(9), pages 1-23, May.
    9. Liesiö, Juuso & Salo, Ahti & Keisler, Jeffrey M. & Morton, Alec, 2021. "Portfolio decision analysis: Recent developments and future prospects," European Journal of Operational Research, Elsevier, vol. 293(3), pages 811-825.

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