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Multiple objective project portfolio selection based on reference points

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  • Theodor J. Stewart

    (University of Cape Town
    University of Manchester)

Abstract

The problem of selecting a portfolio of research and development projects from a set of proposed projects subject to resource constraints is formulated as a multiobjective optimization problem. Three categories of objectives are identified, namely quantitative, qualitative and balance/distributional. The first two are linear in the binary decision variables, but the third involves nonlinear measures of discrepancy between desired and actual distributions of activity amongst defined categories. The result is a nonlinear combinatorial multiobjective optimization problem. A form of reference point approach is motivated and developed as a solution method, and a special purpose genetic algorithm is implemented for obtaining the solution numerically. Extensions to interactive approaches for exploration of the efficient frontier are presented and discussed.

Suggested Citation

  • Theodor J. Stewart, 2016. "Multiple objective project portfolio selection based on reference points," Journal of Business Economics, Springer, vol. 86(1), pages 23-33, January.
    • Handle: RePEc:spr:jbecon:v:86:y:2016:i:1:d:10.1007_s11573-015-0797-x
    DOI: 10.1007/s11573-015-0797-x
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    References listed on IDEAS

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    1. Lean Yu & Shouyang Wang & Fenghua Wen & Kin Lai, 2012. "Genetic algorithm-based multi-criteria project portfolio selection," Annals of Operations Research, Springer, vol. 197(1), pages 71-86, August.
    2. Figueira, J.R. & Liefooghe, A. & Talbi, E.-G. & Wierzbicki, A.P., 2010. "A parallel multiple reference point approach for multi-objective optimization," European Journal of Operational Research, Elsevier, vol. 205(2), pages 390-400, September.
    3. Stewart, Theodor J., 1999. "Evaluation and refinement of aspiration-based methods in MCDM," European Journal of Operational Research, Elsevier, vol. 113(3), pages 643-652, March.
    4. Hassanzadeh, Farhad & Nemati, Hamid & Sun, Minghe, 2014. "Robust optimization for interactive multiobjective programming with imprecise information applied to R&D project portfolio selection," European Journal of Operational Research, Elsevier, vol. 238(1), pages 41-53.
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    Cited by:

    1. Özlem Karsu & Hale Erkan, 2020. "Balance in resource allocation problems: a changing reference approach," OR Spectrum: Quantitative Approaches in Management, Springer;Gesellschaft für Operations Research e.V., vol. 42(1), pages 297-326, March.
    2. Dalton Garcia Borges de Souza & Erivelton Antonio dos Santos & Nei Yoshihiro Soma & Carlos Eduardo Sanches da Silva, 2021. "MCDM-Based R&D Project Selection: A Systematic Literature Review," Sustainability, MDPI, vol. 13(21), pages 1-34, October.

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