Add or multiply?: A tutorial on ranking and choosing with multiple criteria

C. Tofallis

Add or multiply? A tutorial on ranking and choosing with multiple criteria

Research output: Working paper

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Abstract

Simple additive weighting is a well-known method for scoring and ranking alternative options based on multiple attributes. However the pitfalls associated with this approach are not widely appreciated. For example, the apparently innocuous step of normalizing the various attribute data in order to obtain
comparable figures leads to markedly different rankings depending on which normalization is chosen.
When the criteria are aggregated using multiplication such difficulties are avoided because normalization is no longer required. This removes an important source of subjectivity in the analysis because the analyst no longer has to make a choice of normalization type. Moreover, it also permits the modelling of more
realistic preference behaviour, such as diminishing marginal utility, which simple additive weighting does not provide. The multiplicative approach also has advantages when aggregating the ratings of panel members. This method is not new but has been ignored for too long by both practitioners and teachers. We
aim to present it in a non-technical way and illustrate its use with data on business schools

Original language	English
Publisher	University of Hertfordshire
Pages	28
Publication status	Published - 2014

Publication series

Name	Hertfordshire Business School Working Paper

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Copyright and all rights therein are retained by the authors. All persons copying this information are expected to adhere to the terms and conditions invoked by each author's copyright. These works may not be re-posted without the explicit permission of the copyright holders
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Cite this

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N2 - Simple additive weighting is a well-known method for scoring and ranking alternative options based on multiple attributes. However the pitfalls associated with this approach are not widely appreciated. For example, the apparently innocuous step of normalizing the various attribute data in order to obtain comparable figures leads to markedly different rankings depending on which normalization is chosen. When the criteria are aggregated using multiplication such difficulties are avoided because normalization is no longer required. This removes an important source of subjectivity in the analysis because the analyst no longer has to make a choice of normalization type. Moreover, it also permits the modelling of more realistic preference behaviour, such as diminishing marginal utility, which simple additive weighting does not provide. The multiplicative approach also has advantages when aggregating the ratings of panel members. This method is not new but has been ignored for too long by both practitioners and teachers. We aim to present it in a non-technical way and illustrate its use with data on business schools

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Add or multiply? A tutorial on ranking and choosing with multiple criteria

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