Decisions involving multiple criteria are the most difficult to make and often the most important.

This is true in business, government and everyday life; and making good decisions has always mattered throughout human history (see famous quotes).

Multi-Criteria Decision-Making (MCDM, also known as Multi-Criteria Decision Analysis, MCDA) involves identifying the criteria relevant to the decision at hand and determining their relative importance, or ‘weights’. This usually requires both expert judgement and specialised techniques.

An example

As an everyday example, consider the problem of deciding which applicants for a job to hire. Here, identifying the relevant criteria is likely to be relatively straight-forward. For most jobs the criteria would include, amongst others, qualifications, references and social skills.

The hard bit, though, is determining the relative importance of the criteria so that when the applicants for the job are assessed according to the criteria, they are ranked from best to worst, or at least the best applicant is identified.

In the table below, for example, whether Peter is ‘better’ than Fran depends on whether qualifications is more important than social skills, or vice versa (notice that Peter and Fran are the same with respect to references).

Criterion Applicant
  Peter Fran
Qualifications ‘good’ ‘poor’
References ‘average’ ‘average’
Social Skills ‘poor’ ‘good’

Clearly, this issue of determining the relative importance of the criteria would be much more complicated if instead of only three criteria and two candidates (as above) there were, say, five criteria and 50 candidates.

Weighting

A natural approach is to represent the relative importance of the criteria in terms of ‘point values’ or ‘weights’ via a points systems (also known as a ‘scoring’, ‘linear’ or ‘point-count’ system, or, more formally in the MCDM / MCDA academic literature, as an ‘additive multiple criteria value model’).

Points systems are used in a wide variety of applications, and their point values (‘weights’) are determined (sometimes known as ‘scored’) using a variety of scoring methods.

This approach, in general terms, is based, fundamentally, on Benjamin Franklin’s “moral or prudential algebra” – whereby trade-offs are used to simplify complex decisions involving multiple criteria – that he outlined in a letter to Joseph Priestley in 1772.

Naturally, due to the ubiquity of MCDM / MCDA, in addition to this site (which, as noted earlier, is intended to have a practical and user-oriented focus), several groups and societies and many books and journals are also available.

How 1000minds works

Learn more from these simple guides.

Decision-making and prioritization

Value for money

Group decision-making