An MCDM project portfolio web-based DSS for sustainable strategic decision making in an electricity company
| DOI | https://doi.org/10.1108/IMDS-09-2016-0412 |
| Pages | 1362-1375 |
| Published date | 14 August 2017 |
| Date | 14 August 2017 |
| Author | Carolina Lino Martins,Hipólito Marcelo Losada López,Adiel Teixeira de Almeida,Jonatas Araújo Almeida,Mirian Batista de Oliveira Bortoluzzi |
| Subject Matter | Information & knowledge management,Information systems,Data management systems,Knowledge management,Knowledge sharing,Management science & operations,Supply chain management,Supply chain information systems,Logistics,Quality management/systems |
An MCDM project portfolio
web-based DSS for sustainable
strategic decision making in
an electricity company
Carolina Lino Martins, Hipólito Marcelo Losada López,
Adiel Teixeira de Almeida, Jonatas Araújo Almeida and
Mirian Batista de Oliveira Bortoluzzi
Production Engineering Department,
Federal University of Pernambuco, Recife, Brazil
Abstract
Purpose –The purpose of this paper is to analyze the impacts of Portfolio size effect due to scaling issues in
the outcome obtained in a project portfolio selection for an electricity company in Brazil, focusing on
improving business strategic performance.
Design/methodology/approach –The study uses a web-based decision support system (DSS), in which
scaling issues are considered, incorporating results of previous work. The study evaluates 32 projects from
the electricity company and compared the possible results when considering different scales. Additionally,
a sensitivity analysis was conducted to analyze the robustness of the case, using the web-based DSS.
Findings –The results for an interval scale context showed a portfolio with 21 projects, contrasting with the
correct solution of a portfolio containing 23 projects. The latter is related to a ratio scale context, with the
proper transformation of weights, which was found to be robust with a sensitivity analysis using Monte Carlo
simulation. This demonstrates that only appropriate models for selecting projects can improve the
contribution to the company’s permanent strategies of increasing productivity, considering its constraints to
achieve optimal results.
Originality/value –Additive value functions approach imposes certain requirements on the measurement
scales used for the items in a portfolio that should not be ignored, once they have significant impact on the
general portfolio results, which are directly related to the business strategic performance and the facilities of
doing that with a web-based DSS.
Keywords Resource allocation, Portfolio size effect, Project portfolio, Scaling issues,
Sustainable strategic decision, Web-based DSS
Paper type Research paper
1. Introduction
Portfolio problems usually have the aim of choosing, from a set of alternatives, a subset that
considers some constraints given by the context and considering the purpose of the problem
(Belton and Stewart, 2002). A typical portfolio problem is a project portfolio selection that
involves the choice of a subset of projects that seeks to optimize the benefits obtained,
frequently subject to a budget constraint (Vetschera and de Almeida, 2012).
Optimal portfolios can be willingly established with the help of multi-attribute decision
methods that use mathematical programming techniques to formulate them (de Almeida
et al., 2014). Thus, there are plenty of multi-attribute decision-making methods to evaluate
the items from a portfolio, such as outranking methods like PROMETHEE (Vetschera and
de Almeida, 2012), data envelopment analysis (Cook and Green, 2000), or additive value
functions (Kleinmuntz, 2007), that will be the focus of this paper.
Industrial Management & Data
Systems
Vol. 117 No. 7, 2017
pp. 1362-1375
© Emerald PublishingLimited
0263-5577
DOI 10.1108/IMDS-09-2016-0412
Received 30 September 2016
Revised 2 December 2016
31 March 2017
Accepted 5 April 2017
The current issue and full text archive of this journal is available on Emerald Insight at:
www.emeraldinsight.com/0263-5577.htm
This work is part of a research program funded by the Brazilian Research Council (CNPq) and
FACEPE (Foundation for support of Research by the State of Pernambuco).
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IMDS
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