Chapter 24, (MulticriteriaAnalysis).
Multi-criteria Analysis for Decision Making (MCA) THE CONCEPT OF MCA MCA is neither new nor mysterious. Intuitively or formally, individuals use this kind of analysis, for example, when they buy an automobile and simultaneously consider and weigh the factors of safety, functionality, cost, and appearance. Two people may include the same factors but value them differentially; hence they may leave the dealership satisfied with the selection of very different kinds of automobiles. Decision makers, especially in larger organizations, need a systematic approach to capital investment decisions to help them achieve the firm’s stated goals, communicate their decisions effectively to stakeholders, and attain some level of objectivity in their decision making. While the need for some level of subjective valuation in decision making remains, using more comprehensive analytical tools can help improve the process. This chapter presents the theory and practice of MCA for capital decision making.
