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Helsinki University of Technology Systems Analysis Laboratory
RPM-Explorer - A Web-based Tool RPM-Explorer - A Web-based Tool
for Interactive Portfolio Decision Analysisfor Interactive Portfolio Decision Analysis
Erkka Jalonen and Ahti SaloSystems Analysis Laboratory
Helsinki University of TechnologyP.O. Box 1100, 02015 TKK, Finland
http://[email protected]
Helsinki University of Technology Systems Analysis Laboratory
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Robust Portfolio Modelling (RPM)Robust Portfolio Modelling (RPM)
Extends Preference Programming to portfolio problems – A subset of project proposals is selected in view of multiple evaluation criteria
– Project and portfolio value expressed as a weighted sum of criteria scores
– Admits incomplete information about criterion weights and projects’ scores
Focus on non-dominated portfolios (NDP)– A rational DM would not choose a dominated portfolio focus on NDPs
– All NDPs are computed with specialised algorithms
– Core Index value convey the share of NPDs that contain a given project
Liesiö, Mild, Salo (2006). Preference Programming for Robust
Portfolio Modeling and Project Selection, EJOR (to appear).
Helsinki University of Technology Systems Analysis Laboratory
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Dominance relations depend on the information set S– Loose statements lead to a large number of non-dominated portfolios (NDP)
– Complete information typically leads to a unique portfolio
Additional information makes the set of NDPs smaller – This information is modelled through a smaller weight set ( ) and/or
narrower score intervals ( )
– Several preference elicitation methods can be employed
– No new portfolio can become non-dominated
Elicitation efforts can be focused on borderline projects– Additional information affects the Core Index of borderline projects only
Narrower score intervals needed for borderline projects only
Impact of Additional Information (1/2)Impact of Additional Information (1/2)
w wS S
v vS S
( ) ( )N NP S P S
Helsinki University of Technology Systems Analysis Laboratory
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Impact of Additional Information (2/2)Impact of Additional Information (2/2)
No information A rank-ordering
542 NDPs 109 NDPs 104 borderline projects 64 borderline projects
0 | 0, 1w i iS w w w 01 2 3|rank
w wS w S w w w
Helsinki University of Technology Systems Analysis Laboratory
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Add. exter.
Decision Support in RPMDecision Support in RPM
Se
lec
ted
No
t se
lec
ted
Decision rules, heuristics
Additional information
Large set of
projects
Multiple criteria
Resource and
portfolio
constraints
Borderline
projects
focus on
Exterior proj. discard
Core projects choose
Borderline
Negotiation, iteration
Compute non-dom. portfolios
Update ND portfolios
Add. core
Preceding core proj.
Preceding exterior
Loose statements on weights and scores
Helsinki University of Technology Systems Analysis Laboratory
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RPM-Explorer - BackgroundRPM-Explorer - Background
Old: Analyses often suggest a single optimal solution– Recommendation often stated in written documents– Such documents provide little support for the interactive exploration of results
New: Provide an interactive interface to the analysis– Allow stakeholders to specify their preferences about the importance of criteria– Produce decision recommendations based on the stakeholders’ preferences – Visualise decision recommendations for projects based on Core Index values– Make use of widely available communication technologies (=Internet)
Helsinki University of Technology Systems Analysis Laboratory
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Add. exter.
Decision Support Tools for RPMDecision Support Tools for RPM
Se
lec
ted
No
t se
lec
ted
Decision rules, heuristics
Additional information
Large set of
projects
Multiple criteria
Resource and
portfolio
constraints
Borderline
projects
focus on
Exterior proj. discard
Core projects choose
Borderline
Negotiation, iteration
Compute non-dom. portfolios
Update ND portfolios
Add. core
Preeding core proj.
Preceding exterior
Loose statements on weights and scores
RPM-Solver©RPM-Explorer©
E.g Opinions-Online©(voting tool)
Helsinki University of Technology Systems Analysis Laboratory
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Application of RPM-Explorer - Case Study (1/4)Application of RPM-Explorer - Case Study (1/4)
Development of the strategic research
agenda for the Association of
Packaging Industry in Finland
Collaborative consultation process (i) producing research themes (70 participants)
(ii) commenting and elaboration of themes
(the same participants as in previous phase)
(iii) evaluating of themes (10 evaluators)
(iv) analysing them first personally and then
jointly in a workshop (15 decicion makers)
Research themes treated as ’projects’
Helsinki University of Technology Systems Analysis Laboratory
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Application of RPM-Explorer - Case Study (2/4)Application of RPM-Explorer - Case Study (2/4)
Themes (~80) evaluated with regard to three criteria(i) innovativeness
(ii) feasibility
(iii) relevance
– evaluated on a 1-to-7 Likert-scale
– theme-specific scores computed as the mean of evaluators’ ratings
Results communicated by RPM-Explorer and as pdf-documents
Interactive analysis of themes with DMs in two workshops – First one with the Board of the Association (14 leading industrialists)
– Second with 10 including external stakeholders
Helsinki University of Technology Systems Analysis Laboratory
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Application of RPM-Explorer - Case Study (3/4)Application of RPM-Explorer - Case Study (3/4)
Opinions-Online© Database
Internet RPM-Exploreranalysis applet
RPM-Explorer configuration
files
RPM-Solver
analysis software
Theme Producers
ThemeEvaluators
Decision Makers
Opinions-Online ©questionnaire software
Helsinki University of Technology Systems Analysis Laboratory
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Application of RPM-Explorer - Case Study (4/4)Application of RPM-Explorer - Case Study (4/4)
An Example: Theme Group 4: Packaging Materials
Helsinki University of Technology Systems Analysis Laboratory
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RPM-Explorer in Use (1/2)RPM-Explorer in Use (1/2)
Specifications of
preferences results
in corresponding
adjustments in real-
time
Helsinki University of Technology Systems Analysis Laboratory
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RPM-Explorer in Use (2/2)RPM-Explorer in Use (2/2)Several
visualization tools
Explicit support
for project
selection
Helsinki University of Technology Systems Analysis Laboratory
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RPM-Explorer - ConclusionsRPM-Explorer - Conclusions
Positive feedback from users – RMP-Explorer clearly stimulated workshop discussions
Generic software for many problem contexts and uses– Personal learning through Internet-mediated preference analysis
– Collaborative decision making in facilitated workshops
Software may introduce several benefits– Decision making: Personal interests, sensitivity analyses
– Communication: Increased commitment, enhanced understanding
– Information elicitation: Guidance for focusing the elicitation efforts
Helsinki University of Technology Systems Analysis Laboratory
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RPM-Decisions© (1/2)RPM-Decisions© (1/2)
RPM-Decisions©– Combines RPM-Solver and RPM-
Explorer
– Under intensive development
– Demo available
New Features– Web-interface to analysis (RPM-
Explorer)
– Criteria hierarchies
– Project interdependencies
– Soft budget constraints
www.rpm.tkk.fi
Helsinki University of Technology Systems Analysis Laboratory
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RPM-Decisions© (2/2)RPM-Decisions© (2/2)
Spread-sheet form data input– Scores, costs and constraints– Preference elicitation wizard– Constraint wizards
Computation– Approximative algorithms for large problems– Exact algorithms for up to 70 projects
Interactive analysis
– Core indexes, decision rules, robustness– Score scatter plots, additional information– Export for interactive analysis web-interface
Helsinki University of Technology Systems Analysis Laboratory
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On-going RPM Applications On-going RPM Applications
Management of infrastructure assets – Optimization of road and bridge maintenance and repair programmes
– Allocation of resources among different asset classes in view of multiple criteria
Voluntary conservation of forest reserves – Evaluation of conservation value of sites offered by forest owners
– Design of optimal decision analytic evaluation process
Innovation management – Valuation of intellectual property rights (Nokia Wireless Technologies)
– Evaluation of longitudinal data from innovation programmes (Salo et al., 2006)
– Solicitation, commenting, evaluation and selection of innovation themes