A simple approach to multiple attribute decision making using loss functions

Multiple attribute decision making (MADM) methods are very much essential in all fields of engineering, management and other areas where limited alternatives exist and the decision maker has to select the best alternative. Different methods are available in the literature to tackle the MADM problems. The MADM problems are classified as scoring methods, compromising methods and concordance methods. The concordance methods are difficult to understand compared to scoring and compromising methods. Present work introduces a simple-to-understand and easy-to-convince method for multiple attribute decision making problems. This method is based on the philosophy of both scoring and comprising methods and relies on the loss for not choosing the ideal best alternative. Different loss functions such as linear, quadratic and cubic functions have been proposed to calculate the loss. Example problems have been taken from the literature and the proposed method is implemented. Besides the simplicity of the proposed method, the results obtained are found to be in close agreement with rather difficult methods.