MULTICRITERIA METHODOLOGIES IN DECISION MAKING PROCESS IN FINANCE

Nowadays the decision making process in different areas considering multiple influent factors has become a priority. The financial institutions have been facing multiple risks during the recent years, usually interacting risks which makes necessary an efficient decision making, in order to optimize...

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Bibliographic Details
Published in:Researchers world - journal of arts science and commerce 2017-04, Vol.VIII (2), p.105-114
Main Author: Madhi, Doris
Format: Article
Language:English
Subjects:
Capital
Decision makers
Decision making
Decision theory
Economics
Finance
Financial institutions
Institutions
Profitability
Ranking
Ratings & rankings
Variables
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Summary:Nowadays the decision making process in different areas considering multiple influent factors has become a priority. The financial institutions have been facing multiple risks during the recent years, usually interacting risks which makes necessary an efficient decision making, in order to optimize the capital allocation and increase profitability. Different authors have given a great contribution at the purpose, considering different variables which mainly lead to the same conclusion. Thus, decision makers always run the risk of being influenced by their own experience and preferences and a unique and optimal solution can t be reached if multiple criteria are not considered. The existing theories of Multi Criteria Decision Aid suggest the consideration of multiple criteria quantitative and qualitative in order to select the most influential ones and to create a ranking from the best to the worst. The merit of these methods (ELECTRE, PROMETHEE and MURAME) consists in the complex structuring allowance and the consideration of the interacting variables. These methods follow the exploiting phase, which allows the creation of an outranking performance matrix of variables based not only on the manager's preferences, but also on objective evaluation criteria. The main merit associated to these methods is related to their versatility and broader use in different areas of decision making.
ISSN:2231-4172
2229-4686
2229-4686
DOI:10.18843/rwjasc/v8i2/11