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Selection of a Strategic Plan Using an Integrated AHP-Goal Programming Approach

  • Dalila B. M. M. FontesEmail author
  • Teresa Pereira
  • Márcia Oliveira
Conference paper
Part of the Springer Proceedings in Mathematics & Statistics book series (PROMS, volume 278)

Abstract

This work proposes a multi-criteria decision making model to assist in the choice of a strategic plan for a world-class company. The Balanced Scorecard (BSC) is a support tool of Beyond Budgeting that translates a company’s vision and strategy into a coherent set of performance measures. However, it does not provide help in choosing a strategic plan. The selection of a strategic plan involves multiple goals and objectives that are often conflicting and incommensurable. This paper proposes an integrated Analytic Hierarchy Process-Goal Programming (AHP-GP) approach to select such a plan. This approach comprises two stages. In the first stage, the AHP is used to evaluate the relative importance of the initiatives with respect to financial indicators/KPIs; while in the second stage a GP model incorporating the AHP priority scores is developed. The GP model selects a set of initiatives that maximizes the earnings before interest and taxes (EBIT) and minimizes the Capital Employed (CE). The proposed method was evaluated through a case study.

Keywords

Decision-making AHP Goal programming AHP-GP Balanced scorecard 

Notes

Acknowledgements

We acknowledge the financial support of NORTE 2020 - North Portugal Regional Operational Programme, ERDF European Regional Development Fund through the Operational Programme for Competitiveness and Internationalisation - COMPETE 2020 Programme, and by National Funds through the Portuguese funding agency, FCT - Fundao para a Ciłncia e a Tecnologia within projects NORTE-01- 0145-FEDER-000020, POCI-01-0145-FEDER-031821, and PTDC/EEI-AUT/2933/2014 POCI-01-0145-FEDER-016858.

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Copyright information

© Springer Nature Switzerland AG 2019

Authors and Affiliations

  • Dalila B. M. M. Fontes
    • 1
    Email author
  • Teresa Pereira
    • 2
  • Márcia Oliveira
    • 3
  1. 1.Faculdade de Economia da Universidade do Porto, and LIAAD/INESC TECPortoPortugal
  2. 2.Institute of Engineering of Porto of Polytechnic Institute of Porto, CIDEM, ISEPPortoPortugal
  3. 3.Skim TechnologiesLondonUK

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