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Combining scenario planning and multi-criteria decision analysis in practice

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  • Montibeller, Gilberto
  • Gummer, Haidee
  • Tumidei, Daniele

Abstract

The integrated use of Scenario Planning and Multi-Criteria Decision Analysis (MCDA) has been advocated as a powerful combination for providing decision support in strategic decisions. Scenario Planning helps decision makers in devising strategies and thinking about possible future scenarios; while MCDA can support an indepth performance evaluation of each strategy, as well as in the design of more robust and better options. One of the frameworks proposed recently, by Goodwin & Wright, suggests the use of scenario planning with multi-attribute value theory, a mathematically simple, yet extensively researched and widely employed multi-criteria method. However, so far, such framework has been presented only using hypothetical problems. In this paper we describe two case-studies where this approach was used to support real-world strategic decisions. We discuss the challenges and limitations we encountered in applying it; and suggest some possible improvements that could be made to such framework.

Suggested Citation

  • Montibeller, Gilberto & Gummer, Haidee & Tumidei, Daniele, 2007. "Combining scenario planning and multi-criteria decision analysis in practice," LSE Research Online Documents on Economics 22709, London School of Economics and Political Science, LSE Library.
    • Handle: RePEc:ehl:lserod:22709
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    File URL: http://eprints.lse.ac.uk/22709/
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    References listed on IDEAS

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    1. Paul Goodwin & George Wright, 2001. "Enhancing Strategy Evaluation in Scenario Planning: a Role for Decision Analysis," Journal of Management Studies, Wiley Blackwell, vol. 38(1), pages 1-16, January.
    2. Eden, Colin, 1995. "On evaluating the performance of `wide-band' GDSS's," European Journal of Operational Research, Elsevier, vol. 81(2), pages 302-311, March.
    3. J. M. Keynes, 1937. "The General Theory of Employment," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 51(2), pages 209-223.
    4. JosÉ Figueira & Salvatore Greco & Matthias Ehrogott, 2005. "Multiple Criteria Decision Analysis: State of the Art Surveys," International Series in Operations Research and Management Science, Springer, number 978-0-387-23081-8, April.
    5. Finlay, Paul N., 1998. "On evaluating the performance of GSS: Furthering the debate," European Journal of Operational Research, Elsevier, vol. 107(1), pages 193-201, May.
    6. Theodor J Stewart, 2005. "Dealing with Uncertainties in MCDA," International Series in Operations Research & Management Science, in: Multiple Criteria Decision Analysis: State of the Art Surveys, chapter 0, pages 445-466, Springer.
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    Cited by:

    1. Ward, E. John & Dimitriou, Harry T. & Dean, Marco, 2016. "Theory and background of multi-criteria analysis: Toward a policy-led approach to mega transport infrastructure project appraisal," Research in Transportation Economics, Elsevier, vol. 58(C), pages 21-45.

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    JEL classification:

    • J1 - Labor and Demographic Economics - - Demographic Economics

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