Combining scenario planning and multi‐criteria decision analysis in practice

Abstract

Abstract:The integrated use of Scenario Planning and Multi-Criteria Decision Analysis (MCDA) has been advocated as a powerful combination for providing decision support in strategic decisions. Scenario Planning helps decision makers in devising strategies and thinking about possible future scenarios; while MCDA can support an indepth performance evaluation of each strategy, as well as in the design of more robust and better options. One of the frameworks proposed recently, by Goodwin & Wright, suggests the use of scenario planning with multi-attribute value theory, a mathematically simple, yet extensively researched and widely employed multi-criteria method.However, so far, such framework has been presented only using hypothetical problems. In this paper we describe two case-studies where this approach was used to support real-world strategic decisions. We discuss the challenges and limitations we encountered in applying it; and suggest some possible improvements that could be made to such framework.Key-words: scenario planning, multi-criteria decision analysis, strategic decision making, risk and uncertainty." [Under uncertainty] there is no scientific basis on which to form any calculable probability whatever. We simply do not know. Nevertheless, the necessity for action and for decision compels us as practical men to do our best to overlook this awkward fact (…)." John Maynard Keynes (1937)

Extending the use of scenario planning and MCDA for the evaluation of strategic options

“…The use of a standard set of weights across scenarios (Goodwin and Wright, 2001) was not adopted because it was felt that eliciting swing weights, given a specific scenario, was more compatible with examining implications of a scenario for strategy (Parnell et al, 1999;Belton and Stewart, 2002;Durbach and Stewart, 2003;Montibeller et al, 2006). The performance of each strategic option under each scenario is shown in Table 6, with the best performance for each scenario highlighted in bold.…”

“…These include details on the differences between scenarios that favour one option over another, or scenarios which particular options may perform poorly (Dias, 2006). Selecting those options with stable performances close to the ideal, or assessing the spread of performances for each option in each scenario (Montibeller et al, 2006) provide better comparison. These can be contrasted with the concept of regret, which compares the performance of an option with the maximum achievable performance across all strategic options in that scenario (Lempert et al, 2006).…”

“…The literature has proposed several ways of integrating scenarios with a Multi-Criteria Decision Analysis (MCDA) framework (Phillips, 1986;Stewart, 1997Stewart, , 2005Wright and Goodwin, 1999;Goodwin and Wright, 2001;Belton and Stewart, 2002;Montibeller et al, 2006). The integrated methodology provides a range of contexts within which to systematically consider the implications of trade-offs among multiple objectives.…”

Integrated approach to the assessment of CO2e-mitigation measures for the road passenger transport sector in Bahrain

“…One approach suggests splitting the MCA model and creating a specific single-assessment model for each scenario. In this approach, different weights are subsequently assigned to the evaluation criteria under each scenario [130,131]. Schroeder and Lambert [132] used a similar approach in which weights of the evaluation criteria were altered.…”

Priority Setting and Integrated Assessment of Transportation System Vulnerabilities to Deep Uncertainties

“…These applications usually define a limited set of scenarios (three or even fewer) (Comes et al, 2009;Montibeller et al, 2006;Goodwin and Wright, 2001). …”