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Integrating Uncertainties in a Multi-Criteria Decision Analysis with the Entscheidungsnavi

Author

Listed:
  • Sven Peters

    (Decision Theory and Financial Services Group, RWTH Aachen University, Templergraben 64, 52062 Aachen, Germany)

  • Mendy Tönsfeuerborn

    (Decision Theory and Financial Services Group, RWTH Aachen University, Templergraben 64, 52062 Aachen, Germany)

  • Rüdiger von Nitzsch

    (Decision Theory and Financial Services Group, RWTH Aachen University, Templergraben 64, 52062 Aachen, Germany)

Abstract

The Entscheidungsnavi is an open-source decision support system based on multi-attribute utility theory, that offers various methods for dealing with uncertainties. To model decisions with uncertainties, decision-makers can use two categories: Forecast and Parameter Uncertainties. Forecast Uncertainty is modeled with (combined) influence factors using discrete, user-defined probability distributions or predefined ‘worst-median-best’ distributions. Parameter Uncertainty allows imprecision for utilities, objective weights, and probability distributions. To analyze these uncertainties, the Entscheidungsnavi offers several methods and tools, like a robustness check, based on (Monte Carlo) simulations and a sensitivity analysis. The objective weight analysis provides insights into the effects of different objective weight combinations. Indicator impacts, tornado diagrams, and risk profiles visualize the impact of uncertainties in a decision under risk. Risk profiles also enable a check for stochastic and simulation dominance. This article presents the complete range of methods for dealing with uncertainties in the Entscheidungsnavi using a hypothetical case study.

Suggested Citation

  • Sven Peters & Mendy Tönsfeuerborn & Rüdiger von Nitzsch, 2024. "Integrating Uncertainties in a Multi-Criteria Decision Analysis with the Entscheidungsnavi," Mathematics, MDPI, vol. 12(11), pages 1-28, June.
    • Handle: RePEc:gam:jmathe:v:12:y:2024:i:11:p:1746-:d:1408221
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    References listed on IDEAS

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