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International Journal of Civil Engineering and Technology (IJCIET)

Volume 8, Issue 11, November 2017, pp. 982–994, Article ID: IJCIET_08_11_097

Available online at http://http://www.iaeme.com/ijciet/issues.asp?JType=IJCIET&VType=8&IType=11

ISSN Print: 0976-6308 and ISSN Online: 0976-6316

© IAEME Publication Scopus Indexed

A NEW APPROACH TO THE MULTI-CRITERIA

APPRAISAL OF INVESTMENT ALTERNATIVES

FOR INFRASTRUCTURE PROJECTS

Bui Trong Cau

Dept. of Construction Engineering, University of Transport and Communications,

Dongda Distr., Hanoi, Vietnam

Nguyen Thi Hong

Dept. of Construction Engineering, University of Transport and Communications,

Dongda Distr., Hanoi, Vietnam

ABSTRACT

This paper introduces a new approach to multi-criteria appraisal of investment

alternatives for infrastructure projects. The appraisal is supposed to identify and

eliminate unfeasible investment alternatives and then to select the best alternative

among feasible investment alternatives. The new approach has been developed by

combining the Modified Conjunctive and Analysis Hierarchy Process (AHP) methods

with Group Decision-making methods. First, the Modified Conjunctive method

combined with Group Decision-making methods is employed in identifying and

eliminating unfeasible investment alternatives. Then the AHP method combined with

Group Decision-making methods is utilized to select the best alternative among

feasible investment alternatives based on the principles of [Utility of Cost] - [Utility of

Project] analysis. A case study for the Mekong bridge in Cambodia done to validate

applicability of the new approach is also briefly represented in this paper.

Key words: Modied Conjuctive Method, Analytic Hierarchy Process (AHP), Group

Decision-Making, Utility of Project, Utility of Cost.

Cite this Article: Bui Trong Cau and Nguyen Thi Hong. A New Approach to the

Multi-Criteria Appraisal of Investment Alternatives for Infrastructure Projects.

International Journal of Civil Engineering and Technology, 8(11), 2017, pp. 982–994.

http://www.iaeme.com/IJCIET/issues.asp?JType=IJCIET&VType=8&IType=11

1. INTRODUCTION

Appraisal of investment alternatives in the feasibility studies stage of project’s life cycle

strongly influences investment effectiveness of construction projects. From national benefit’s

viewpoint, goals of investment in infrastructure projects are usually multiple but not simply

single. Therefore, the multi-criteria appraisal of investment alternatives for infrastructure

projects is an essential requirement. In terms of mathematics, the multi-criteria appraisal of

investment alternatives for infrastructure projects is a complex problem of fuzzy multi-criteria

Bui Trong Cau and Nguyen Thi Hong


decision-making in which the criteria may be vague, non-quantifiable, conflicting,

incomplete, and incommensurable. It is a mutually exclusive appraisal in which only one

alternative may be selected. In addition, the appraisal requires the identification and

elimination of unfeasible alternatives and it is usually done by a group rather than an

individual.

There have been two main approaches proposed to deal with this complex problem. The

first approach is based on mathematical algorithm orientation such as employment of Multiple

Attribute Utility Theory for the appraisal by Shtub, J. F. Bard, Sh. Bloberson ( et al. This

approach ensures that the appraisal is very well structured. However, since it is based on

mathematical algorithm orientation, it is too complicated for practitioners and, therefore, very

difficult for practical application. On the contrary, the second approach is based on decision-

making process orientation. P.D. Spagon (1981) proposed a multi-phases appraisal process

and S. Green (1999) proposed a Simple Multi-Attribute Rating Technique. This second

approach has an advantage of easy application to the appraisal in practice. However, as this

approach is based on decision-making process orientation, it is weakly structured and,

therefore, people involved in the appraisal are usually not satisfactory with the appraisal

result. It is important that the both approaches have not established a right best-alternative

selection criterion for the appraisal.

This paper introduces a new approach to the multi-criteria appraisal of investment

alternatives for infrastructure projects. The new approach has been developed by combining

the mathematical algorithm orientation with the decision-making process orientation. First,

the Modified Conjunctive method is employed in identifing and eliminating unfeasible

investment alternatives. Then, the AHP method is utilized to select the best alternative among

feasible alternatives based on the principles of [Utility of Cost] - [Utility of Project] analysis.

The group decision-making methods are used to make interventional decisions during

appraisal process. Due to limit space, this paper will represent the application procedures

rather than theoretical bases of the developed approach. A case study for the Mekong Bridge

project done to validate applicability of the new approach will also be briefly described.

2. MATHEMATICAL MODEL OF THE MULTI-CRITERIA

APPRAISAL

The multi-criteria appraisal of investment alternatives for infrastructure projects can be

expressed correctly and concisely in the following mathematical model.

There is a set of n investment alternatives:

{ } (1)

Each alternative Ai is attributed by a set of concerned investment goals, Gi, represented

for the alternative, and cost, Ci, required to obtain the desired goals. Thus, the set of n

investment alternatives, A, can be expressed as:

{ } (2)

From viewpoint of the national benefits, the goals of investment in infrastructure projects

include several aspects such as fitness for use purpose, durability, reliability, safety, socio-

economic benefits, appearance, effects on environments, construction duration of project, etc.

Each of these aspects may include several attributes, and then, each of these attributes may

again include several sub-attributes and so on. Let us denote a set of m attributes, hereafter

called criteria, associated with each investment alternative by vector g = {g1, g2,...,gi,..,gm}.

A New Approach to the Multi-Criteria Appraisal of Investment Alternatives for Infrastructure

Projects


Let gij be criterion gj of investment alternative Ai, so a matrix of criteria, G, for n alternatives

is obtained as follows:

1 , 1,ijG g i n j m

(3)

The problem of the multi-criteria appraisal of investment alternatives for infrastructure

projects is how to identify and eliminate unfeasible investment alternatives and select the best

alternative among the feasible investment alternatives based on considering and appraising

matrix of criteria G = ijg versus vector of cost C ={Ci}, i =1,2,...,n; j = 1,2,...m.

3. STRUCTURING THE HIERARCHY FOR

3.1. Determining Appraisal Criteria

Hierarchies are divided into two types: structural hirerachies and functional hirerachies. AHP

method recommends structural hirerachy type for determining appraisal criteria [4]. Figure 1

shows a typical hierarchy for investment alternatives in the structural form. The hierarchy

may include several levels. The branches of the structural hierarchy for determining appraisal

criteria do not necessarily descend to the last level but may end at any level. The last level

consists of investment alternatives. There exists neither only one right hierarchy for a project

nor strict rule for structuring the hierarchy for projects. In the multi-criteria appraisal of

investment alternatives for infrastructure projects, the hierarchy should be made by group

decision-making methods [5].

Figure 1 - Typical Hierarchy for Determining Appraisal Criteria

Criterion 1

Criterion 2-1 Criterion 2-2 ...

Criterion 2 ...

Overall Investment Goal

Criterion g1 Criterion g2 Criterion gm…

Alterntive A1 Alternative A2 Alternative An…

Having structured the hierarchy, the criteria corresponding to the last elements of each

branch of the structural hierarchy must be determined either in quantitative terms, in known

scales or in linguistic expression to obtain matrix of criteria , 1, ; 1,ijG g i n j m for the

appraisal.



4. ELIMINATING UNFEASIBLE INVESTMENT ALTERNATIVES

Unfeasible investment alternatives are identified and eliminated by applying a Modified

Conjunctive method associated with group decision-making methods. Let [gi] be the minimal

acceptable level for criterion gi. According to the Classical Conjunctive method, alternative

Ai, is an acceptable alternative only if:

1,2....ij jg g j m (4)

However, in the appraisal of infrastructure projects, the relationship between quantity of a

criterion and utility of project with respect to that criterion is not necessarily in direct ratio to

be applied Formula (4). Generally, the appraisal criteria of infrastructure projects can be

classified into three types named Type I, Type II, and Type III based on the relationship

between their quantity and utility of project with respect to them [6]. Type I includes criteria

whose quantity and utility of project with respect to them are in direct-ratio relation.

Examples of the type-I criteria are service life, durability, safety degree, benefits, etc., When

quantity of these criteria increases, utility of project with respect to them will increase

correspondingly and vice versa. Type II includes the criteria whose quantity and utility of

project with respect to them are in inverse-ratio relation. Examples of the type-II criteria are

construction duration, negative effects on environment, etc. Type III includes the other criteria

whose quantity and utility of alternatives with respect to them are in non-linear relation.

Examples of type III criteria are temperature in a theater and humidity in a laboratory etc.

Both very high temperature or very low temperature in a theater are not comfortable for

people watching dramas. Neither the higher humidity nor the lower humidity is good for

certain tests or experiments. Cost of alternatives and utility of project with respect to cost is

also in inverse-ratio relation. In addtion, investment fund for a project is always limited.

Let I

jg be the minimal acceptable level for type-I criterion, I

jg , and II

jg be the

maximum acceptable level for type-II criterion, II

ijg . The acceptable levels for the type-Ill

criteria are set up in a range such that III

jg j where III

jg is the best value and j is the

allowable tolerance of type-III criterion III

jg . Let [C] be the maximum acceptable level for

cost. Thus, alternative Ai is a feasible alternative only if it satisfies the following sufficient

conditions:

{

[

]

(5)

Note that not all of m criteria of matrix of criteria, G, require to be regulated or specified

an acceptable level. On the contrary, not all criteria that require to be regulated or specified an

acceptable level must be present in the matrix of criteria, G. To identify and eliminate

unfeasible alternatives, the acceptable levels for criteria and cost must first be determined.

Some jg are regulated by governmental regulatory agencies. The others and [C] are

usually specified by the decision-makers [6]. If all the investment alternatives for a project are

unfeasible, a re-generation of investment alternatives must take place.


Projects


5. DETERMINING THE UTILITY OF PROJECT FOR INVESTMENT

ALTERNATIVES

The utility of project with respect to each investment alternative is determined through the

three following steps:

1. Measuring the relative importance level of criteria with respect to the overall investment

goal.

2. Determining the relative performance scores of alternatives with respect to each criterion

3. Aggregating the results of the two steps above

5.1. Measuring the Relative Importance Level of Criteria with respect to the


The relative importance level of criteria with respect to the overall investment goal is

measured in the following way:

1. The relative importance level is measured for the whole hierarchy in order from top to

down.

2. The relative importance level of criteria at any level with respect to the overall investment

goal is determined by aggregating their relative importance level with respect to their mother

criterion at the upper adjacent level and the relative importance level of their mother criterion

with respect to the overall investment goal.

3. The relative importance level of criteria with respect to their mother criterion is measured

through aggregating subjective judgements of pair-wise comparisons.

Let us represent the method of measuring the relative importance level with respect to the

overall investment goal for criteria at a level y in Figure 2.

Figure 2 Measuring the Importance Level for Criteria at Level y

Criterion y-1 ... Criterion y-j Criterion y-s

Criterion (y-1) - l ...

...

Level (y-1)

Level y

The criteria at level y are decomposed from their mother criteria at the upper adjacent

level, (y-1). For example, criteria (y-1),...,(y-s) are decomposed from their mother criterion (y-

1)-l at level (y-1). Let us denote criteria (y-1),...,(y-j),...,(y-s) by 1 ,...g ,...gy y y

j sg respectively

and criterion (y-1)-l of the upper adjacent level (y-1) by 1y

lg . Thus, the relative importance

level of criterion y

jg with respect to the overall investment goal is determined by aggregating

the relative importance level of that criterion with respect to its mother criterion, 1y

lg , and the



relative importance level of its mother criterion, 1y

lg , with respect to the overall investment

goal.

The relative importance level of criteria y

jg with respect to their mother criterion is

measured through aggregating judgments of pair-wise comparisons for them with respect to

their mother criterion 1y

lg . This involves a subjective assignment of preference weights to

each criterion in the pair-wise comparisons with respect to their mother criterion 1y

lg . In

general, when comparing two criteria with respect to their mother criterion, the decision-

makers first discern which criterion is more important in terms of contribution to their mother

criterion and then ascertain how much the importance level is by selecting a value from the 9-

points scale below [7]:

1: equally important

3: weakly more important

5:strongly more important

7: demonstratively more important

9: absolutely more important

2,4,6, 8: intermediate values between two adjacent judgements

Let value Iij be assigned by comparing criterion y

ig to y

jg with respect to criterion 1y

lg .

Thus, the resulting factor Iij, is the preference weight of criterion y

ig compared to criterion y

jg

with respect to criterion 1y

lg . We have a matrix I which reflects the preference of the pair-

wise comparison as follows:

sjiII ij ,...,2,1,, (6)

The pair-wise comparison is carried out by the decision-maker group for project and

values ijI sji ,...,2,1, are determined by group decision-making methods. Having

obtained matrix I, a weighting vector yW pertaining to the criteria can be determined by

computing the Eigenvector corresponding to the maximum Eigenvalue of the matrix. This

vector indicates the set of weights for criteria reflecting the relative importance level of each

criterion in comparison with the others with respect to their mother criterion at the upper

adjacent level.

y

s

yyy wwww ,...,2,1 (7)

Now, the relative importance level or weight of criteria y

jg respect to the overall

investment goal that is the only criterion at the top of the hierarchy can be determined. Let us

denote the relative importance level of the mother criterion 1y

lg with respect to the overall

investment goal by Wl (Wl has been determined in previous step), the relative importance level

of criteria y

jg , j = 1,2,...,s with respect to the overall investment goal by wj, j = 1,2,...,s. Thus,

wj are obtained by the following formula:

.,...,2,1 sjwww l

y

jj (8)

Perform the presented calculation procedure for the whole hierarchy from top to down, we

can obtain a weighting vector indicating the relative importance level for all appraisal criteria,

jg , with respect to the overall investment goal.


Projects


mj wwwww ,...,,...,2,1

(9)

Since decision-makers in practice are only estimating the "true" elements by assigning

them values from the 9-point scale, it is essential to check the consistency of the estimates in

matrix I. The consistency of matrix I is guaranteed when max s with max and s are the

largest Eigenvalue and the size of the square pair-wise comparison matrix I respectively.

When max is not close to s, we must revise the estimates in matrix I so that the consistency is

preserved. The AHP method measures the overall consistency of judgements by means of a

consistency ratio, CR. CR = CI / RI where CI is the consistency index of the pair-wise

comparison matrix. CI is determined by 1/max xxCI . RI is the consistency index

derived from a completely arbitrary matrix whose entries are randomly chosen. Through

simulation, T. Saaty obtained the following results for RI [2]:

s

4 5

6

7

8

9

10

RI

0.90

1.12

1.24

1.32

1.41

1.45

1.49

Experience suggests that CR should be less than 0.09 for a 4 x 4 matrix and 0.1 for a

larger matrix.

5.2. Determining the Relative Performance Scores of Alternatives with respect to

each Criterion

a) With respect to Quantitative Criteria: In general, the quantitative criteria measured in

known scales also include three types classified based on the relationship between their

quantity and utility of alternatives with respect to them as described above. To deal with each

mentioned-above type of quatitative criteria, different methods must be employed. The

relative performance scores of alternatives with respect to each type-I criterion are simply

determined by normalizing their performance values. No subjective judgement of the

decision-makers is needed for this case. Let number of type-I criteria be b. We can easily

obtain a vector bjrrrr njjjj ,...,2,1,...,, 21 indicating set of weights for alternatives

reflecting the relative performance score of each alternative compared to the others with

respect to each of type-I criteria by the following formula:

1

n

ij ij ij

i

r g g

(10)

ijr is the relative performance score of alternative iA compared to the other alternatives

with respect to quantitative type-I criterion jg ; ijg is the performance value of alternative A,

in terms of quantitative type-I criterion jg . To determine the relative performance scores of

alternatives with respect to each of type-II criteria, the performance values of alternatives in

terms of each type II-criterion are first converted into their inverse numbers so that the

inverse-ratio relationship between quantity of the type-II criteria and utility of alternatives

with respect to them becomes the direct-ratio relationship. Then, the relative performance

scores of alternatives with respect to the type II- criteria with converted values will be

determined similarly to those with respect to the type-I criteria. Let number of type-II criteria



be c. We can easily obtain a vector cjrrrr njjjj ,...,2,1,...,, 21 indicating a set of

weights for alternatives reflecting the relative performance score of each alternative compared

to the others with respect to each type-II criterion by the following formula:

1

1 1n

ij

iij ij

rg g

(11)

ijr is the relative performance score of alternative iA compared to the other alternatives

with respect to type-II criterion jg ; ijg is the performance value of alternative A in terms of

type-II criterion jg . Generally, the type-III criteria are considered fuzzy criteria. Thus, the

relative performance scores of alternatives with respect to the type-III criteria are determined

similarly to those with respect to quanlitative criteria represented below.

b) With respect to Quanlitative Criteria: If criterion jg is qualitative, the relative

performance scores of alternatives with respect to it are determined through aggregating

judgements of pair-wise comparisons for all alternatives. The process of aggregating

judgements of alternatives with respect to each qualitative criterion jg is similar to that of

aggregating judgements of criteria with respect to their mother criterion presented above. Let

us denote the number of qualitative criteria by f, the decision-makers will have to make f pair-

wise comparison matrices , 1,2,...,jP j f as follows:

nkhPP jhkj ,...,2,1,, (12)

jP is the pair-wise comparison matrix of alternatives with respect to qualitative criterion ,

jg , j=1,2,f. Element jhkP is the relative performance of alternative h compared to alternative k

with respect to qualitative criterion jg . The pair-wise comparisons are carried out by the

decision-maker group for project and values ihkP fjnkh ,...,2,1&,...,2,1, are determined

by group decision-making methods. Similarly, we can determine vectors

),...,,( 21 njjjj rrrr fj ,...,2,1 pertaining to all alternatives with respect to each of the

qualitative criteria by computing the Eigenvectors corresponding to the maximum

Eigenvalues of matrices Pj, fj ,...,2,1 . Values ijr 1,2,..., ni are the relative

performance scores of alternative iA compared to the other alternatives with respect to each of

qualitative criteria jg . The consistency of estimates in matrices jP must also be checked by

the procedure of checking consistency represented above. Gathering all vectors jr obtained,

we have matrix R that shows the relative performance scores of alternatives with respect to

each criterion:

mjnirR ij ,...,2,1;,...,2,1, (13)

5.3. Aggregating the Results

Having measured the relative importance level of criteria with respect to the overall

investment goal and determined the relative performance scores of alternatives with respect to


Projects


1 2, ,...,

1,2,...,i

G T

G G G G

n

mG

ij j

j m

U Rw

U U U U

U r w i n

each criterion, the aggregation of results to determine the Utility of Project corresponding to

each alternative is very simple. It is of multiplying matrix R by the transpose of vector w.

(14)

G

iU is the Utility of Project of investment alternative iA , or the overall performance score

of investment alternative iA with respect to the overall investment goal.

6. DETERMINING THE UTILITY OF COST OF INVESTMEN

ALTERNATIVES

Cost in this appraisal context is considered the input to obtain the output that is the overall

goal of project. Therefore, the relationship between the utility of cost of an alternative and the

amount cost of that alternative is in direct ratio. Since cost is measured in monetary terms, the

utility of cost of investment alternatives can be determined directly without subjective

judgments of the decision-makers. However, on the one hand, the costs of alternatives are not

comparable due to the time value of money. On the other hand, construction duration and,

especially, service life of infrastructure projects are very long. In addition, costs expended for

a infrastructure project vary from time to time, from investment alternative to investment

alternative. Thus, it is essential to make all of the costs of alternatives to be comparable for

the appraisal.

In principle, it is possible to transform the money values of costs to any moment so that

the costs become comparable. Let the present time be the time when the appraisal takes place.

Let r be the interest rate per interest period k (r is in a decimal figure), N be the number of

interest periods, *

kC be the cost expended in interest period k, and kC be the present value of

cost *

kC . kkk rCC 1* . Let us denote the cost of alternative iA expended in interest

period k by *

ikC . The money value of the whole cost of alternative iA at the present time,

denoted by iC will be determined by the following formula:

N

k

k

iki rCC1

* 1

(15)

Note that because service life of infrastructure projects is very long, the interest period for

calculation should be one year and interest rate r should be the nominal interest rate. It is

believed that the one-year interest period and the nominal interest rate are accurate enough for

the appraisal of infrastructure projects. In addition, the problem of inflation should be

considered in the calculation due to long service life of infrastructure projects. Let us denote

inflation rate by f and the interest rate without inflation by r', the interest rate r for the

computation is determined by the following formula:

frfrfrr ''11'1 (16)

Having transformed all the costs of alternatives to be comparable equivalent values, the

utility of cost of each alternative in comparison with the others can be determined directly by



1 2

1

, ,...,

i

C C C C

n

nC

i i

i

U U U U

U C C

normalizing their transformed costs. Let us denote the transformed cost of alternative iA by

iC , the utility of cost of alternative iA by C

iU . The vector indicating the utility of cost of

alternatives can be easily obtained as follows:

(17)

7. ANALYSIS OF [UTILITY OF PROJECT] - [UTILITY OF COST]

The analysis of [Utility of Designed Quality] - [Utility of Cost] is done based on the principle

of [Incremental Benefit – Incremental Cost] Analysis as follows:

1. If either the utilities of project G

iU or utilities of cost C

iU are the same: choose the

alternative with MAX G CU U

2. If neither G

iU nor C

iU are the same: If there are two alternatives, compute:

between the two alternatives Ai and Aj. If U U 1G C ,choose the higher cost

alternative. Otherwise, choose the lower cost alternative. If there are three or more

alternatives, repeatedly compare for two alternatives, choose the better and than continuously

compare for the chosen alternative and a subsequent alternative and so on. The result of this

series comparison shall be the overall best selection.

8. PERFORMING SENSITIVITY ANALYSIS

Sensitivity analysis is especially necessary to make the final decision when two or more

alternatives appear to be close in CU UG ratio. What to do is to change the importance level

of selected major criteria while keeping the proportions of the importance levels for the other

criteria the same so, again, they all, including the changed criteria, add to one. Decision-

makers will then see changes of the outcome to make the final decision. The pessimistic and

optimistic situations that may happen to projects and possible reallocations of resources to

enhance the best alternative selected are also considered in sensitivity analysis.

9. CASE STUDIES

The proposed multi-criteria appraisal approach has been applied to appraise investment

alternatives for Mekong Bridge in Cambodia and Laixuan Bridge and Caugie – Ninhbinh

Expressway in Vietnam. The following is a summary of appraisal results for the Mekong

Bridge case. There were six investment alternatives made for the Mekong Bridge as shown in

Table 1.

Applying the method of structuring the hierarchy to determine appraisal criteria presented

above, the hierarchy structured for the appraisal was obtained as shown in Figure 3. Applying

formula (5), all of six alternatives were feasible. Performing calulations by Expert Choice

software, the utility of project and the utility of the cost of investment alternatives were

determined as follows:


Projects


1 2 1 2

1 2 1 2

1 2 1 2

0.185 0.183 0.165 0.177

0.150 0.160 0.146 0.221

0.155 0.167 0.153 0.138

G G C C

A A A A

G G C C

B B B B

G G C C

C C C C

U U U U

U U U U

U U U U

Table 1 Investment Alternatives for the Mekong Bridge in Cambodia

Construction

Location

Alternatives Note

Neak loeng A-1

A-2

Pre-stressed Concrete Cable-Stayed Bridge

Pre-stressed Concrete Cable-Stayed Bridge

Prek tamak

B-1

B-1

Pre-stressed Concrete Box-Girder Bridge


Kongpong cham

C-1

C-2

Suspension Bridge


Since neither G

iU nor C

iU are the same, the analysis of [Utility of Project] -[Utility of

Cost] for the alternatives is done as below.

Compare Alternative A-1 with Alternative A-2: Because 1 20.185 0.183G G

A AU U

while 1 20.165 0.177C C

A AU U , alternative A-1 is certainly better and alternative A-2 is

eliminated.

Compare Alternative A-1 with Alternative B-1: Compute

1 1

1 1

0.185 0.1501.842 1

0.165 0.146

G G G

A B

C C C

A B

U U U

U U U

Alternative A-1 is selected.

Compare Alternative A-1 with Alternative B-2: Because 1 20.185 0.160G G

A BU U

while 1 20.165 0.221C C

A BU U , alternative A-1 is again selected.

Compare Alternative A-1 with Alternative C-1: Compute

1 1

1 1

0.185 0.1552.5 1

0.165 0.153

G G G

A C

C C C

A C

U U U

U U U

Alternative A-1 is continuously selected.

Compare Alternative A-1 with Alternative C-2: Compute

1 2

1 2

0.185 0.1670.666 1

0.165 0.138

G G G

A C

C C C

A C

U U U

U U U

Alternative C-2 is better than alternative A-1 and is the best alternative among feasible

alternatives. Because the best alternative, C-2, is much better than the second-best alternative,

A-1, 0.666 1 the sensitivity analysis in this case study is not necessary.



Improving

Accessibility

between Ph.P

- Rural Areas

Improving

International

Road

Newtwork

Main

Functions

of Project

Promoting

Open Market

and Market

Economy

Upgrading

Living

Standards

in Rural

Promoting

Agricultural

Development

Promoting

Resource

Development

Balancing

Development

of the Area

Effects

on

Regional

Development

Fitness for

Use Purpose

Sercive

Life of

Project

Earthquake

Ressistant

Ability

of Project

Durability

of Project

Reliability

of Project

in Sercive

Life

Reliability

of Project

Safety

Degree

in

Operation

Safety

Degree

in

Construction

Safety of

Project

Internal

Rate

of

Return

Employment

Chance

by

Project

Benefit

from

Technology

Transfer

Economic

Benefits

of

Project

Reducing

Over-

-population

in Capital

Social

Benefits

of

Project

Benefits

of Project

Affects

on

Natural

Environment

Human

Resettlement

Affects on

Environment

Construction

Duration

Beauty

of

Project

Appreance

of Project


Figure 8-2 Hierarchy Structured for the Appraisal

10. CONCLUSIONS

The developed approach to the multi-criteria appraisal of investment alternatives for

infrastructure projects comprises quantitative methods, Modified Conjunctive and AHP

methods, associated with group decision-making methods. The quantitative methods play a

role as a backbone for the appraisal while group decision-making methods are employed to

make interventional decisions. The developed approach is a combination of mathematical

algorithm orientation and decision-making process orientation. It is able to handle fuzzy

attributes associated with investment alternatives in an explicit manner and solve inter-group

conflicts among decision-makers. In addition, the approach can assist decision-makers in

understanding their problems to make better decisions by organizing their thinking,

quantifying and integrating their separate evaluations. The applications of the developed

approach in practice have proved that it is reliable and easily applicable.

REFERENCES

[1] Shtub A., Bard J.F., Globerson S.– Project Management: Engineering, Technology, and

Implementation. Prentice Hall, Inc. Englewood Cliffs. NJ.

[2] Spagon P.D. (1981) – Group Decision-Making in the Public Sector: A Process Approach

to Conflict Resolution. Ph.D. Dissertation, Stanford University.

[3] Green S.D. (1999) – Modeling Client Business Processes as an Aid to Strategic Briefing.

J. of Construction Management and Economics, 1999, 17.

[4] Saaty T.L. (1990) – Multi-criteria Decision-Making: The Analytic Hierarchy Process, 2nd

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a new approach to the multi-criteria appraisal of ... · appraisal of investment alternatives in...

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