A project portfolio selection problem in a group decision-making context

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January 2012, 8(1): 243-261. doi: 10.3934/jimo.2012.8.243

A project portfolio selection problem in a group decision-making context

Ana F. Carazo ^1, , Ignacio Contreras ^2, , Trinidad Gómez ^3, and Fátima Pérez ^3,

1.	Department Economics, Quantitative Methods, and Economic History, Pablo de Olavide University, Ctra de Utrera Km 1, Sevilla 41013, Spain
2.	Department Economics, Quantitative Methods, and Economic History, Pablo de Olavide University, Sevilla 41013, Spain
3.	Department of Applied Economics (Mathematics), University of Málaga, Campus El Ejido s/n, 29071 Málaga, Spain, Spain

Received October 2010 Revised July 2011 Published November 2011

Abstract
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Firms often face the problem of deciding how to share scarce resources between a set of candidate projects and simultaneously schedule them; that is, how to choose a project portfolio. Usually, this decision-making process is carried out in groups, and all the individuals’ preferences have to be considered simultaneously to determine an acceptable solution. We propose a two-step approach to assist groups in making this crucial decision. In the first step, a multiobjective model is solved that takes into account the characteristics of the organization (private or public) as well as the many key factors required by the decision group, such as available resources, synergies between projects, and other constraints to suitably select and schedule efficient project portfolios. Usually, the decision-making group has to choose from among a large number of efficient solutions. In the second step, the decision-making group refines the potential solutions. This second step is characterised by a flexible selection of weights, which helps to rank the set of efficient solutions and maximise consensus between the group members.

Keywords: multi-objective, Group Decision, non-linear binary models., portfolio project selection.

Mathematics Subject Classification: Primary: 90C30; Secondary: 90B5.

Citation: Ana F. Carazo, Ignacio Contreras, Trinidad Gómez, Fátima Pérez. A project portfolio selection problem in a group decision-making context. Journal of Industrial & Management Optimization, 2012, 8 (1) : 243-261. doi: 10.3934/jimo.2012.8.243

References:

[1]	A. F. Carazo, T. Gómez, J. Molina, A. Hernández-Díaz, F. Guerrero and R. Caballero, Solving a comprehensive model for multi-objective project portfolio selection,, Computers & Operational Research, 37 (2010), 630. doi: 10.1016/j.cor.2009.06.012. Google Scholar
[2]	C. Chien, A portfolio-evaluation framework for selecting R&D projects,, R&D Management, 32 (2002), 359. doi: 10.1111/1467-9310.00266. Google Scholar
[3]	I. Contreras, M. A. Hinojosa and A. M. Mármol, A class of flexible weight indices for ranking alternatives,, IMA Journal of Management Mathematics, 16 (2005), 71. doi: 10.1093/imaman/dph033. Google Scholar
[4]	I. Contreras, Procedimientos de consenso para problemas de decisión en grupo con múltiples criterios,, Rect., 6 (2005), 61. Google Scholar
[5]	I. Contreras, A distance-based consensus model with flexible choice of rank-position weights,, Group Decision and Negotiation, 19 (2010), 441. doi: 10.1007/s10726-008-9127-9. Google Scholar
[6]	W. D. Cook and M. Kress, A data envelopment model for aggregation preference ranking,, Management Science, 36 (1990), 1302. doi: 10.1287/mnsc.36.11.1302. Google Scholar
[7]	W. D. Cook and M. Kress, An extreme-point approach for obtaining weighted ratings in qualitative multicriteria decision making,, Naval Research Logistic, 43 (1996), 519. doi: 10.1002/(SICI)1520-6750(199606)43:4<519::AID-NAV5>3.0.CO;2-A. Google Scholar
[8]	L. Dinu and F. Manea, An efficient approach for the rank aggregation problem,, Theoretical Computer Science, 359 (2006), 455. doi: 10.1016/j.tcs.2006.05.024. Google Scholar
[9]	C. Dwork, R. Kumar, M. Naor and D. Sivakumar, "Rank Aggregation Methods for the Web,", in, (2001), 613. Google Scholar
[10]	A. Fernández Carazo, Un estudio holístico de la selección y planificación temporal de carteras de proyectos,, Rect., 9 (2008), 5. Google Scholar
[11]	C. Freeman, "The Economics of Industrial Innovation,", Frances Printer, (1982). Google Scholar
[12]	J. Gaytán and J. García, Multicriteria decision on interdependent infrastructure transportation projects using an evolutionary-based framework,, Applied Soft Computing, 9 (2009), 512. doi: 10.1016/j.asoc.2008.07.006. Google Scholar
[13]	F. Ghasemzadeh, N. Archer and P. Iyogun, A zero-one model for project portfolio selection and scheduling,, Journal of the Operational Research Society, 50 (1999), 745. Google Scholar
[14]	F. Glover, M. Laguna and R. Martí, Fundamentals of scatter search and path relinking,, Control and Cybernetics, 29 (2000), 653. Google Scholar
[15]	Y. Goletsis, J. Psarras and J. E. Samoulidis, Project ranking in the Armenian energy sector using a multicriteria method for groups. OR models for energy policy, planning and management, Part I,, Annals of Operations Research, 120 (2003), 135. doi: 10.1023/A:1023330530111. Google Scholar
[16]	J. González-Pachón and C. Romero, Distanced based consensus methods: A goal programming approach,, Omega, 27 (1999), 341. doi: 10.1016/S0305-0483(98)00052-8. Google Scholar
[17]	S. B. Graves and J. L. Ringuest, "Models & Methods for Project Selection: Concepts from Management Science, Finance and Information Technology,", M. A. Kluwer Academic Publishers, (2003). Google Scholar
[18]	N. Halouani, H. Chabchoub and J.-M. Martel, PROMETHEE-MD-2T method for project selection,, European Journal of Operations Research, 195 (2009), 841. doi: 10.1016/j.ejor.2007.11.016. Google Scholar
[19]	A. A. Hashimoto, A ranked voting system using a DEA/AR exclusion model: A note,, European Journal of Operations Research, 97 (1997), 600. doi: 10.1016/S0377-2217(96)00281-0. Google Scholar
[20]	K. Heidenberger and C. Stummer, Research and development project selection and resource allocation: A review of quantitative modelling approaches,, International Journal of Management Reviews, 1 (1999), 197. doi: 10.1111/1468-2370.00012. Google Scholar
[21]	G. Hu, L. Wang, S. Fetch and B. Bidanda, A multi-objective model for project portfolio selection to implement lean and Six Sigma concepts,, International Journal of Production Research, 46 (2008), 6611. doi: 10.1080/00207540802230363. Google Scholar
[22]	C. L. Hwang and M. J. Lin, "Group Decision Making Under Multiple Criteria: Methods and Applications,", Lecture Notes in Economics and Mathematics System, 281 (1987). Google Scholar
[23]	G. Islei and G. Lockett, Group decision making: Suppositions and practice,, Socio-Economic Planning Science, 25 (1991), 67. doi: 10.1016/0038-0121(91)90030-U. Google Scholar
[24]	J. Klapka and P. Piños, Decision support system for multicriterial R&D and information systems projects selection,, European Journal of Operations Research, 140 (2002), 434. doi: 10.1016/S0377-2217(02)00081-4. Google Scholar
[25]	C. Lin and P. J. Hsieh, A fuzzy decision support system for strategic portfolio management,, Decision Support Systems, 38 (2007), 383. doi: 10.1016/S0167-9236(03)00118-0. Google Scholar
[26]	G. Lockett, B. Hetherington and P. Yallup, Modeling a research portfolio using AHP: A group decision process,, R&D Management, 16 (1986), 151. doi: 10.1111/j.1467-9310.1986.tb01168.x. Google Scholar
[27]	A. L. Medaglia, D. Hueth, J. C. Mendieta and J. A. Sefair, A multiobjective model for the selection and timing of public enterprise projects,, Socio-Economic Planning Science, 42 (2008), 31. doi: 10.1016/j.seps.2006.06.009. Google Scholar
[28]	J. R. Moore and N. R. Baker, An analytical approach to scoring model design-application to research and development project selection,, IEEE Transactions on Engineering Management, 16 (1969), 90. Google Scholar
[29]	E. A. Pessemier and N. D. Baker, Project and program decisions in research development,, R&D Management, 2 (1971), 3. doi: 10.1111/j.1467-9310.1971.tb00088.x. Google Scholar
[30]	R. Santhanam and J. Kyparisis, A decision model for interdependent information system project selection,, European Journal of Operations Research, 89 (1996), 380. doi: 10.1016/0377-2217(94)00257-6. Google Scholar
[31]	G. R. Sotirov and E. B. Krasteva, An approach to group decision-making under uncertainty with application to project selection,, Annals of Operations Research, 51 (1994), 115. doi: 10.1007/BF02032480. Google Scholar
[32]	C. Stummer and K. Heidenberger, Interactive R&D portfolio analysis with project interdependencies and time profiles of multiple objectives,, IEEE Trans. Eng. Management, 50 (2003), 175. Google Scholar
[33]	H. Sun and T. Ma, A packing-multiple-boxes model for R&D project selection and scheduling,, Technovation, 25 (2005), 1355. doi: 10.1016/j.technovation.2004.07.010. Google Scholar
[34]	Y. M. Wang, K. S. Chin and J. B. Yang, Three new models for preference voting and aggregation,, Journal of Operational Reseach Society, 58 (2006), 1389. doi: 10.1057/palgrave.jors.2602295. Google Scholar
[35]	C. H. Yeh, H. Deng, W. Santoso and Y. Xu, Multicriteria group decision support for information systems project selection,, Lecture Notes in Computer Science, 5579 (2009), 152. doi: 10.1007/978-3-642-02568-6_16. Google Scholar

show all references

References:

[1]	A. F. Carazo, T. Gómez, J. Molina, A. Hernández-Díaz, F. Guerrero and R. Caballero, Solving a comprehensive model for multi-objective project portfolio selection,, Computers & Operational Research, 37 (2010), 630. doi: 10.1016/j.cor.2009.06.012. Google Scholar
[2]	C. Chien, A portfolio-evaluation framework for selecting R&D projects,, R&D Management, 32 (2002), 359. doi: 10.1111/1467-9310.00266. Google Scholar
[3]	I. Contreras, M. A. Hinojosa and A. M. Mármol, A class of flexible weight indices for ranking alternatives,, IMA Journal of Management Mathematics, 16 (2005), 71. doi: 10.1093/imaman/dph033. Google Scholar
[4]	I. Contreras, Procedimientos de consenso para problemas de decisión en grupo con múltiples criterios,, Rect., 6 (2005), 61. Google Scholar
[5]	I. Contreras, A distance-based consensus model with flexible choice of rank-position weights,, Group Decision and Negotiation, 19 (2010), 441. doi: 10.1007/s10726-008-9127-9. Google Scholar
[6]	W. D. Cook and M. Kress, A data envelopment model for aggregation preference ranking,, Management Science, 36 (1990), 1302. doi: 10.1287/mnsc.36.11.1302. Google Scholar
[7]	W. D. Cook and M. Kress, An extreme-point approach for obtaining weighted ratings in qualitative multicriteria decision making,, Naval Research Logistic, 43 (1996), 519. doi: 10.1002/(SICI)1520-6750(199606)43:4<519::AID-NAV5>3.0.CO;2-A. Google Scholar
[8]	L. Dinu and F. Manea, An efficient approach for the rank aggregation problem,, Theoretical Computer Science, 359 (2006), 455. doi: 10.1016/j.tcs.2006.05.024. Google Scholar
[9]	C. Dwork, R. Kumar, M. Naor and D. Sivakumar, "Rank Aggregation Methods for the Web,", in, (2001), 613. Google Scholar
[10]	A. Fernández Carazo, Un estudio holístico de la selección y planificación temporal de carteras de proyectos,, Rect., 9 (2008), 5. Google Scholar
[11]	C. Freeman, "The Economics of Industrial Innovation,", Frances Printer, (1982). Google Scholar
[12]	J. Gaytán and J. García, Multicriteria decision on interdependent infrastructure transportation projects using an evolutionary-based framework,, Applied Soft Computing, 9 (2009), 512. doi: 10.1016/j.asoc.2008.07.006. Google Scholar
[13]	F. Ghasemzadeh, N. Archer and P. Iyogun, A zero-one model for project portfolio selection and scheduling,, Journal of the Operational Research Society, 50 (1999), 745. Google Scholar
[14]	F. Glover, M. Laguna and R. Martí, Fundamentals of scatter search and path relinking,, Control and Cybernetics, 29 (2000), 653. Google Scholar
[15]	Y. Goletsis, J. Psarras and J. E. Samoulidis, Project ranking in the Armenian energy sector using a multicriteria method for groups. OR models for energy policy, planning and management, Part I,, Annals of Operations Research, 120 (2003), 135. doi: 10.1023/A:1023330530111. Google Scholar
[16]	J. González-Pachón and C. Romero, Distanced based consensus methods: A goal programming approach,, Omega, 27 (1999), 341. doi: 10.1016/S0305-0483(98)00052-8. Google Scholar
[17]	S. B. Graves and J. L. Ringuest, "Models & Methods for Project Selection: Concepts from Management Science, Finance and Information Technology,", M. A. Kluwer Academic Publishers, (2003). Google Scholar
[18]	N. Halouani, H. Chabchoub and J.-M. Martel, PROMETHEE-MD-2T method for project selection,, European Journal of Operations Research, 195 (2009), 841. doi: 10.1016/j.ejor.2007.11.016. Google Scholar
[19]	A. A. Hashimoto, A ranked voting system using a DEA/AR exclusion model: A note,, European Journal of Operations Research, 97 (1997), 600. doi: 10.1016/S0377-2217(96)00281-0. Google Scholar
[20]	K. Heidenberger and C. Stummer, Research and development project selection and resource allocation: A review of quantitative modelling approaches,, International Journal of Management Reviews, 1 (1999), 197. doi: 10.1111/1468-2370.00012. Google Scholar
[21]	G. Hu, L. Wang, S. Fetch and B. Bidanda, A multi-objective model for project portfolio selection to implement lean and Six Sigma concepts,, International Journal of Production Research, 46 (2008), 6611. doi: 10.1080/00207540802230363. Google Scholar
[22]	C. L. Hwang and M. J. Lin, "Group Decision Making Under Multiple Criteria: Methods and Applications,", Lecture Notes in Economics and Mathematics System, 281 (1987). Google Scholar
[23]	G. Islei and G. Lockett, Group decision making: Suppositions and practice,, Socio-Economic Planning Science, 25 (1991), 67. doi: 10.1016/0038-0121(91)90030-U. Google Scholar
[24]	J. Klapka and P. Piños, Decision support system for multicriterial R&D and information systems projects selection,, European Journal of Operations Research, 140 (2002), 434. doi: 10.1016/S0377-2217(02)00081-4. Google Scholar
[25]	C. Lin and P. J. Hsieh, A fuzzy decision support system for strategic portfolio management,, Decision Support Systems, 38 (2007), 383. doi: 10.1016/S0167-9236(03)00118-0. Google Scholar
[26]	G. Lockett, B. Hetherington and P. Yallup, Modeling a research portfolio using AHP: A group decision process,, R&D Management, 16 (1986), 151. doi: 10.1111/j.1467-9310.1986.tb01168.x. Google Scholar
[27]	A. L. Medaglia, D. Hueth, J. C. Mendieta and J. A. Sefair, A multiobjective model for the selection and timing of public enterprise projects,, Socio-Economic Planning Science, 42 (2008), 31. doi: 10.1016/j.seps.2006.06.009. Google Scholar
[28]	J. R. Moore and N. R. Baker, An analytical approach to scoring model design-application to research and development project selection,, IEEE Transactions on Engineering Management, 16 (1969), 90. Google Scholar
[29]	E. A. Pessemier and N. D. Baker, Project and program decisions in research development,, R&D Management, 2 (1971), 3. doi: 10.1111/j.1467-9310.1971.tb00088.x. Google Scholar
[30]	R. Santhanam and J. Kyparisis, A decision model for interdependent information system project selection,, European Journal of Operations Research, 89 (1996), 380. doi: 10.1016/0377-2217(94)00257-6. Google Scholar
[31]	G. R. Sotirov and E. B. Krasteva, An approach to group decision-making under uncertainty with application to project selection,, Annals of Operations Research, 51 (1994), 115. doi: 10.1007/BF02032480. Google Scholar
[32]	C. Stummer and K. Heidenberger, Interactive R&D portfolio analysis with project interdependencies and time profiles of multiple objectives,, IEEE Trans. Eng. Management, 50 (2003), 175. Google Scholar
[33]	H. Sun and T. Ma, A packing-multiple-boxes model for R&D project selection and scheduling,, Technovation, 25 (2005), 1355. doi: 10.1016/j.technovation.2004.07.010. Google Scholar
[34]	Y. M. Wang, K. S. Chin and J. B. Yang, Three new models for preference voting and aggregation,, Journal of Operational Reseach Society, 58 (2006), 1389. doi: 10.1057/palgrave.jors.2602295. Google Scholar
[35]	C. H. Yeh, H. Deng, W. Santoso and Y. Xu, Multicriteria group decision support for information systems project selection,, Lecture Notes in Computer Science, 5579 (2009), 152. doi: 10.1007/978-3-642-02568-6_16. Google Scholar

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