Interactive Optimization Using the Method of Relative Improvement Preferences: Methodology and Empirical Evaluation

Abstract

This paper presents a revolutionary computerized multiple criteria decision making method. The method was tested in a mathematical programming application by solving a complex multiple criteria production optimization problem. The proposed method, labeled the method of relative improvement preferences (RIP), is compared to the standard “what if” spreadsheet analysis in an empirical examination. Both of these computer-supported methods are appropriate for solving multiple criteria decision-making problems, especially when the number of alternatives is very large. Many interactive techniques are based on the standard what if model. The RIP method proposed in this paper, however, is a departure from the standard model. It is very user friendly, considers competing and non-linear criteria, allows the units of measurement of the various criteria to be different, and operates more efficiently than the spreadsheet model. It uses a scaling algorithm that adjusts for the diversity in impacts caused by problems with heterogeneous criteria and a step-sizing algorithm that rapidly ascends to the optimal solution.