Optimization Methods for a Stakeholder Society: A Revolution in Economic Thinking by Multi-objective Optimization / Edition 1

by W.K. Brauers

Overview

For both public and private managers, the book Optimization Methods for a Stakeholder Society is today's key to answer the problem of a sustainable development world. This world has to take into account the meaning of all stakeholders involved and has to reconcile a number of objectives, such as economic growth, employment and preservation of the ecosystem. Traditional methods, such as cost-benefit, are outmoded as they translate all these objectives into monetary costs, a materialistic approach. On the contrary, objectives have rather to stick to their own units, eventually indicators.

Product Details

ISBN-13:	9781402076817
Publisher:	Springer US
Publication date:	11/30/2003
Series:	Nonconvex Optimization and Its Applications , #73
Edition description:	2004
Pages:	342
Product dimensions:	6.10(w) x 9.25(h) x 0.03(d)

Table of Contents

	Introduction	1
	Which economics	1
	The aim of this work	2
	Notes introduction	5
Part 1	The Link with More Traditional Economics
Chapter 1	New economics against the history of economic thought	9
1.1	Classical economists about objectives	9
1.2	General economic interdependence	9
1.3	The partial approach	10
1.4	The rise of mathematics in economics	12
	Notes chapter 1	14
Chapter 2	Success and shortcomings of econometric models	17
2.1	Significance of econometric models	17
2.2	Definition of I/O and its relation to the Walrasian system	20
2.3	SAM and General Equilibrium Models	21
2.4	The stability of the technical coefficients and the inverse matrix	22
2.5	Structural changes and Input-Output	24
2.6	Benchmarking and Input-Output	26
2.7	Multiple objectives and multiple units in input-output analysis	26
2.8	Conclusions about traditional model building for application	28
	Notes chapter 2	30
Part 2	The Advent of New Economics
Chapter 1	Creative and prospective thinking	37
1.1	Some preliminary definitions	37
1.2	Open discussion methods	38
1.3	Nominal methods	39
1.4	Nominal Group Technique	44
1.5	The Cross-Impact Technique	47
Annex 1	A nominal group technique on the economic situation of the developing countries over the period 1987-1996	49
Annex 2	Application for the economic situation of Lithuania over the period (2002-2011)	53
Annex 3	Nominal Group Technique on the business outlook of the facilities sector of Lithuania over the period (2003-2012)	55
	Notes chapter 1	61
Chapter 2	Simulation and Sensitivity Analysis	65
2.1	Categories of Simulation	65
2.2	Parametric Analogs	68
2.3	Sensitivity Analysis	69
	Notes chapter 2	70
Chapter 3	Scenario Writing	71
3.1	Origin and classification	71
3.2	How to write Scenarios?	71
3.3	Some weak points of Scenario Writing	73
Annex 1	Economic policy in Tanzania with different input-output scenarios as a basis	75
Annex 2	Scenarios for Lithuania 2002 - 2011	77
Annex 3	Scenarios for the future of the facilities sector of Lithuania 2003 - 2012	81
	Notes chapter 3	83
Part 3	New Economics for a Stakeholder Society
Chapter 1	Introduction to multiple objective utility theory	87
1.1	Why from old to new economics?	87
1.2	Value or utility? The risk problem	89
1.3	Multiple Objective Utility Theory inside the theory of the statistical universe	91
1.4	Measurement of attributes by indicators	93
1.5	Measurement of quality	97
1.6	Hierarchy of objectives. What does hierarchy mean?	99
1.7	A hierarchy of objectives for the Democratic Republic of Congo	100
1.8	Conflict resolution	105
1.9	Instruments for a new economic policy	105
	Notes chapter 1	107
Chapter 2	Some traditional methods to approach the problem of multiple objectives	111
2.1	Cost-Benefit Analysis and Decision Tree Analysis	111
2.2	Cost-Effectiveness Analysis and Fractional Programming	112
2.3	The Scorecard Method	113
2.4	The weighting concept	114
2.5	The approach based on a series of binary comparisons	118
	Notes chapter 2	123
Chapter 3	Multifarious comparisons for objectives and attributes	125
3.1	The approach of a complete a priori priority between the multifariously compared objectives	125
3.2	The filtering stage	128
3.3	The possibility of a dominance stage	129
3.4	Dominance and the law of decreasing marginal utility	131
	Notes chapter 3	137
Chapter 4	The indifference method	139
4.1	The filtering stage of the indifference method	139
4.2	The indifference stage of the indifference method	139
Annex 1	Case study: the indifference method for arms procurement	143
	Notes chapter 4	145
Chapter 5	How to optimize in a stakeholder society?	147
Part 4	Reference Point Theory a Method to Compare Until Now Incomparable Alternatives
Chapter 1	Reference point theory as a solution for multiobjective utility	151
1.1	The ranking stage for the until now incomparable	151
1.2	Generalization for the until now incomparable alternatives	152
1.3	Indifference curve analysis and reference point theory	153
1.4	Consideration of the Maximal Criterion Reference Point	157
1.5	The Utopian Criterion Vector and the Aspiration Criterion Vector	158
1.6	The normalization of attributes in reference point theory	158
1.7	How to measure the distance between the discrete points of the alternatives and the reference point?	159
1.8	The problem of an efficient point that is not proper efficient and the reference point theory	161
1.9	Is there a the danger of a reverse order?	162
1.10	Alternatives generated during the process: the continuous case	163
1.11	Conclusions	164
1.12	Case study: how to choose a wife?	165
	Notes chapter 1	169
Chapter 2	Project planning, analysis and evaluation	171
2.1	An example of project planning	171
2.2	The objectives for project planning	172
2.3	The selection of the project	172
2.4	Different competing projects	175
2.5	Multiple objectives in industrial management	178
2.6	Project evaluation	183
	Notes chapter 2	187
Chapter 3	Reference point theory in seaport planning	189
3.1	Comparison of effectiveness of different concepts of seaports in an analytical and prospective way, including new developments	189
3.2	The filtering stage in seaport planning	190
3.3	The ranking stage in seaport planning	194
3.4	Appraisal of projects for the installation of a container terminal in a seaport of a developing country	196
	Notes chapter 3	204
Chapter 4	Privatization and reference point theory	205
4.1	The problem	205
4.2	The filtering stage in the case of privatization	206
4.3	An indifference stage in privatization	206
4.4	Simulation exercise for privatization in Ukraine	207
4.5	Some practical consequences of application of reference point theory for privatization	211
	Notes chapter 4	213
Chapter 5	Marketing with multiple objectives for consumer goods with applications for a department store	215
5.1	Objectives for a department store	215
5.2	Filtering and normalization in the case of a department store	215
5.3	The application of the reference point theory with maximal criterion values for a department store	219
5.4	A chance for an in-between alternative	220
5.5	Conclusions about reference point theory in connection with the expansion of a department store	222
	Notes chapter 5	223
Part 5	A Multiplicative Form for Multiobjective Optimization
Chapter 1	The multiplicative representation of multiobjective optimization	227
1.1	Forms of the utility function	227
1.2	Bilinear and multilinear forms	228
1.3	The full-multiplicative form	229
1.4	What about the unit of utility u[subscript j]?	231
1.5	An illustrative application	232
1.6	Is normalization still necessary?	233
1.7	Objectives moving in a different direction	236
1.8	An illustrative example with objectives moving in a different direction	237
1.9	Multiplicative form on the basis of geometric means	238
1.10	The danger of a reverse order in the multiplicative form	238
1.11	Attributes of objectives raised to powers	239
1.12	Some restrictions of the multiplicative representation	243
	Notes chapter 1	244
Chapter 2	The multiplicative representation in scenarios for an optimal economic policy in Belgium	247
2.1	Political and economic structure of Belgium	247
2.2	Eleven scenarios for an optimal economic growth in Belgium	248
2.3	The ranking after the application of the multiplicative representation	250
2.4	Is it possible to stress the importance of some objectives?	253
2.5	Relevance of attributes raised to powers for an optimal Belgian economic policy	254
2.6	Conclusions	258
	Notes chapter 2	259
Chapter 3	An application for arms procurement	261
3.1	The application of the full-multiplicative form	261
3.2	Does there exist a danger for a reverse order?	263
3.3	Conclusions concerning the choice of a fighter plane in Belgium	265
	Notes chapter 3	266
Chapter 4	Multiplicative representation and project planning for a developing country	267
4.1	A national investment board in a developing country	267
4.2	The filtering stage in project planning for a developing country	269
4.3	Indifference or ranking in project planning for a developing country	270
	Notes chapter 4	279
Chapter 5	An optimal input-output structure for a developing country such as Tanzania	281
5.1	Some characteristics of input- output in developing countries	281
5.2	Economic policy with several input-output scenarios as a basis in a developing country	282
5.3	Linkages between the scenarios and the economic policy of Tanzania	285
5.4	Conclusions	287
	Notes chapter 5	289
Part 6	Ratio Analysis a Separate Method for Multiple Objectives Optimization?
Chapter 1	Mechanical methods and multiobjective optimization	293
1.1	Ratio analysis a new approach?	293
1.2	The choice between different ratio systems	293
1.3	Ratio analysis applied for multiobjective optimization	295
	Notes chapter 1	296
Chapter 2	Ratio analysis for a department store	297
2.1	One of the alternatives is taken as a reference	297
2.2	The Van Delft and Nijkamp method of maximum value	298
2.3	The Van Delft and Nijkamp method of square roots	298
2.4	The Voogd ratios	299
Annex 1	Some methods of ratio analysis applied for a department store	301
Annex 2	The Voogd ratios and the Van Delft and Nijkamp method of square roots applied for a department store	307
Chapter 3	Ratio analysis for arms procurement	311
3.1	The choice of fighter planes	311
3.2	Ratios analysis as applied for arms procurement	313
3.3	Conclusions on arms procurement	316
Chapter 4	Ratio analysis and project planning for a developing country	317
4.1	The policy of a national investment board in a developing country	317
4.2	The indifference or the ranking stage with ratio analysis for a developing country	318
Chapter 5	Conclusions on ratio systems	323
5.1	Choice of ratios	323
5.2	Significance of the ratio system	324
5.3	The ratio system as a new method for multiobjective optimization	324
	Notes chapter 5	328
Chapter 6	General conclusions of the book	329
	Index	337