Why CBA is superior to other decision-making methods?

When it comes to the choosing problem, defined as selecting one and only one alternative (or a combination), the best of all, Choosing By Advantages (CBA) is a method that stands out from others. As explained in the previous blog, 4 types of Multiple-Criteria Decision-Making (MCDM) methods exist in the literature:

1. Goal-programming and multi-objective optimization methods (Linear Optimization)
2. Value-based methods (e.g., AHP and WRC)
3. Outranking methods (e.g., ELECTRE)
4. Choosing by advantages (e.g., CBA Tabular Method)

As discussed in the first blog, a “good” decision-making method is one that is consistent, one that helps in organizing the information in a transparent fashion, one that is anchored to the context of the decision, one that helps in preventing double counting information, one that helps in reaching consensus, one that can be documented, and one that helps in explaining the decision easily.

The four types of methods above can be documented and can be used to explain decisions. However, CBA is superior to them in many regards:

• CBA is superior to Goal Programming methods when it comes to understand what are the relevant factors that differentiate the alternatives. Goal Programming methods are made for optimizing an infinite number of possible alternatives, but when there are few alternatives (2 to 10) it makes more sense to use CBA and understand what differentiate each other instead of setting an objective formula.

• CBA is superior to Value-based methods, when it comes to consistency and collaboration. Research has proven than AHP and WRC, the most used MCDM methods, are flawed when removing irrelevant factors that do not differentiate the alternatives. AHP and WRC weigh factors, AHP though pairwise comparison and WRC directly. However, factors cannot be weighted in a consistent manner, since they are a representation of a general idea, and it does not represents a context-based judgment. For example, when choosing a construction method could you say that productivity is more important than safety? Or that safety is more important than productivity? These are question that lead to an endless and useless argumentations process that says nothing about the real alternatives that are available for choosing. By contrast, CBA is based on understanding what are the advantages of one alternative over another and then based on actual advantages decision-makers need to asses the importance of those advantages. Therefore, CBA helps decision makers to focus on the decision context and avoid unnecessary discussions.

• CBA is more practical than outranking methods, because one can create a ranking of the best alternatives, which is very useful to compare value vs. cost, to prioritize alternatives, and to allocate money to projects. Outranking methods, avoid weighting factors as AHP and WRC do, but they do not produce a ranking of the alternatives.

Finally, out of the 4 MCDM methods that exist, CBA is superior in promoting collaboration and provide a transparent rationale for decision makers when choosing among few alternatives (2-10).

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Different Types Of Decision-Making Methods

Organizations make multiple types of decisions on a daily basis, such as: hiring people, selecting technologies, designing operations, etc. It is logical to think that different types of decisions will require different types of decision-making methods. These methods can yield different decisions, even using the same raw data. So, which one should you use?

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