J 2018

SENSITIVITY CURVE OF DECISION-MAKING PROCESS OF THE COMPANY

CHADT, Karel and Martin PETŘÍČEK

Basic information

Original name

SENSITIVITY CURVE OF DECISION-MAKING PROCESS OF THE COMPANY

Name (in English)

SENSITIVITY CURVE OF DECISION-MAKING PROCESS OF THE COMPANY

Authors

CHADT, Karel and Martin PETŘÍČEK

Edition

ACC JOURNAL, Liberec, Technická univerzita v Liberci, 2018, 1803-9782

Other information

Type of outcome

Článek v odborném periodiku

Confidentiality degree

není předmětem státního či obchodního tajemství

Organization unit

University College Prague – University of International Relations and Institute of Hospitality Management and Economics, Ltd.

Keywords in English

Sensitivity curve; Risk analysis; Monte Carlo simulation; Multiple-criteria decision making

Tags

International impact, Reviewed
Změněno: 26/9/2018 09:33, doc. Ing. Martin Petříček, Ph.D.

Abstract

V originále

This article focuses on the issue of the sensitivity curve as an indicator of risk during decision-making process. The aim of this article is to present the measurement capabilities for sensitivity of the decision-making process within the issue of the use of quantitative methods in managerial decision making. The approach that is presented in the article uses the measurement of the sensitivity of the decision-making model to its input parameters. The whole decision-making process is a multiple-criterion and to determine a compromise variant there is Weighted Sum Approach (WSA) method used. This article uses the coefficient that determines the percentage change that is necessary to choose the second best option. In addition this approach is supported by formation of sensitivity curve. This curve represents the change in value of the output (using method WSA) when changing the selected input parameter of decision-making process. To build a sensitivity curve there is probabilistic simulation approach (Monte Carlo method) used.

In English

This article focuses on the issue of the sensitivity curve as an indicator of risk during decision-making process. The aim of this article is to present the measurement capabilities for sensitivity of the decision-making process within the issue of the use of quantitative methods in managerial decision making. The approach that is presented in the article uses the measurement of the sensitivity of the decision-making model to its input parameters. The whole decision-making process is a multiple-criterion and to determine a compromise variant there is Weighted Sum Approach (WSA) method used. This article uses the coefficient that determines the percentage change that is necessary to choose the second best option. In addition this approach is supported by formation of sensitivity curve. This curve represents the change in value of the output (using method WSA) when changing the selected input parameter of decision-making process. To build a sensitivity curve there is probabilistic simulation approach (Monte Carlo method) used.