Topsis Method
Topsis Method
Abstract
In this paper, one of the multi-criteria models in making decision, a Technique
for Order Preference by Similarity to an Ideal Solution (TOPSIS), is described. Some
of the advantages of TOPSIS methods are: simplicity, rationality, comprehensibility,
good computational efficiency and ability to measure the relative performance for each
alternative in a simple mathematical form.
The paper has a review character. It systematises the knowledge within the scope
of techniques of decision taking with the use of the TOPSIS method. Simple numerical
examples that reference real situations show practical applications of different aspects
of this method.
The paper is organized as follows. The Introduction presents a short overview
of the decision making steps as well as MCDM techniques. Section 1 presents matrix
representation of the MCDM problem. Section 2 describes the TOPSIS procedure
for crisp data, and Section 3 for interval data. The TOPSIS algorithm in group decision
environment in the case of crisp and interval data is also presented. In Section 4
the problem of qualitative data in TOPSIS model is discussed. The numerical examples
showing applications of those techniques in the negotiation process are presented
in Section 5. Finally, conclusions and some concluding remarks are made in last
section.
Keywords
TOPSIS method, numerical data, interval data, positive ideal solution, negative
ideal solution.
Introduction
Multi-criteria decision making (MCDM) refers to making choice of the
best alternative from among a finite set of decision alternatives in terms
of multiple, usually conflicting criteria. The main steps in multi-criteria decision
making are the following [Hwang, Yoon, 1981; Jahanshahloo, Hosseinzadeh,
Lofti, Izadikhah, 2006a]:
MULTI-CRITERIA DECISION MAKING MODELS... 201
– a scalar value that accounts for both the best and worst alternatives ability
to measure the relative performance for each alternative in a simple
mathematical form,
– possibility for visualization.
In general, the process for the TOPSIS algorithm starts with forming
the decision matrix representing the satisfaction value of each criterion with
each alternative. Next, the matrix is normalized with a desired normalizing
scheme, and the values are multiplied by the criteria weights. Subsequently,
the positive-ideal and negative-ideal solutions are calculated, and the distance
of each alternative to these solutions is calculated with a distance measure.
Finally, the alternatives are ranked based on their relative closeness to the ideal
solution. The TOPSIS technique is helpful for decision makers to structure
the problems to be solved, conduct analyses, comparisons and ranking of the
alternatives. The classical TOPSIS method solves problems in which all
decision data are known and represented by crisp numbers. Most real-world
problems, however, have a more complicated structure. Based on the original
TOPSIS method, many other extensions have been proposed, providing support
for interval or fuzzy criteria, interval or fuzzy weights to modeled imprecision,
uncertainty, lack of information or vagueness.
In this paper, the classical TOPSIS algorithms for crisp, as well as
interval data are described. Interval analysis is a simple and intuitive way
to introduce data, uncertainty for complex decision problems, and can be used
for many practical applications. An extension of the TOPSIS technique to
a group decision environment is also investigated. The context of multi-criteria
group decision making in both crisp and interval data are described. Finally,
situations where criteria and their weight are subjectively expressed by
linguistic variables are considered. The practical applications of the TOPSIS
technique in estimating offers, for instance, in buyer-seller exchange are also
proposed.
C1 C2 … Cn
A1 x11k x12k … x1kn
A2 k
x 21 k
x 22 … x 2kn
… … … … …
Am x k
x k … k
x mn
m1 m2
where:
− A1 , A2 , ... , Am are possible alternatives that decision makers have to choose
from,
− C1 ,C2 , ... , Cn are the criteria for which the alternative performance is
measured,
− xijk is the k − decision maker rating of alternative A with respect to the
i
k
criterion C j ( xij is numerical, interval data or fuzzy number).
In this way for m alternatives and n criteria we have matrix X k = xijk ( )
where xijk is value of i − alternative with respect to j − criterion for k −
decision maker, j = 1,2, ... , n, k = 1,2, ... , K .
The relative importance of each criterion is given by a set of weights
which are normalized to sum to one. Let us denote by W k = [ w1k , w2k , ... , wnk ]
a weight vector for k − decision maker, where wkj ∈ ℜ is the k − decision
maker weight of criterion C j and w1k + w2k + ... + wnk = 1.
In the case of one decision maker we write xij , w j , X, respectively.
Multi-criteria analysis focuses mainly on three types of decision
problems: choice − select the most appropriate (best) alternative, ranking −
draw a complete order of the alternatives from the best to the worst, and
sorting − select the best k alternatives from the list.
206 Ewa Roszkowska
Step 1. Construct the decision matrix and determine the weight of criteria.
( )
Let X = xij be a decision matrix and W = [ w1 , w2 , ... , wn ] a weight vector,
where xij ∈ ℜ , w j ∈ ℜ and w1 + w2 + ... + wn = 1.
Criteria of the functions can be: benefit functions (more is better) or cost
functions (less is better).
xij
nij = , (2.1*)
max xij
i
MULTI-CRITERIA DECISION MAKING MODELS... 207
for i = 1, … , m; j = 1, … , n.
Step 5. Calculate the separation measures from the positive ideal solution
and the negative ideal solution.
In the TOPSIS method a number of distance metrics can be applied*.
The separation of each alternative from the positive ideal solution is given as
1/ p
⎛ ⎞
∑( )⎟
n
+ p⎟
d i+ =⎜ vij − v j , i = 1,2, … , m. (2.5)
⎜
⎝ j =1 ⎠
The separation of each alternative from the negative ideal solution is given as
1/ p
⎛ n ⎞
∑( ) p
d i− =⎜ v − v −j ⎟ , i = 1,2, … , m. (2.6)
⎜ j=1 ij ⎟
⎝ ⎠
Where p ≥ 1 . For p = 2 we have the most used traditional n-dimensional
Euclidean metric.
∑ (v )
n
2
d i+ = ij − v+j , i = 1,2, … , m, (2.5*)
j =1
∑ (v )
n
2
d i− = − v −j , i = 1,2, … , m. (2.6*)
ij
j =1
where 0 ≤ Ri ≤ 1, i = 1,2, … , m.
*
Possible metrics the first power metric (the least absolute value terms), Tchebychev metric or others [see
Kahraman, Buyukozkan, Ates, 2007; Olson 2004].
MULTI-CRITERIA DECISION MAKING MODELS... 209
In this part we explain the detailed TOPSIS procedure for group decision
making based on the Shih, Shyur and Lee proposition [Shih, Shyur, Lee, 2007].
Step 2. Calculate the normalized decision matrix for each decision maker.
In this step some of the earlier described methods of normalization can be used.
Let us assume that we use
xijk
rijk = .
(2.8)
∑( )
m
2
xijk
i =1
Step 3. Determine the positive ideal and negative ideal solutions for each
decision maker.
The positive ideal solution A k + for k − decision maker has the form
⎧ ⎛ ⎞⎫
⎪⎛⎜ ⎞⎜ ⎟⎪
A k+
= {
r1k + , r2k + ,..., rnk + } = ⎨ max(rij ) | j ∈ I ⎟, ⎜ min(rij ) | j ∈ J ⎟ ⎬.
⎜
k
⎟
k (2.9)
⎪⎝ i ⎠⎜ i ⎟⎪
⎩ ⎝ ⎠⎭
The negative ideal solution A k − for k- decision maker has the form:
⎧ ⎛ ⎞⎫
⎪⎛⎜ ⎞⎜ ⎟⎪
A k−
= {
r1k − , r2k − ,..., rnk − } = ⎨ min (rij ) | j ∈ I ⎟, ⎜ max(rij ) | j ∈ J ⎟ ⎬,
⎜
k
⎟
k (2.10)
⎪⎝ i ⎠⎜ i ⎟⎪
⎩ ⎝ ⎠⎭
where I is associated with the benefit criteria and J with the cost criteria.
210 Ewa Roszkowska
Step 4. Calculate the separation measures from the positive ideal solution
and the negative ideal solution.
∑ dik+ ∑d k−
i
(2.13)
di*+ = k=1
and di*− = k=1
K K
or
geometric mean:
K K
di*+ = K ∏dik+ and di*− = K ∏d k−
i . (2.13*)
k=1 k=1
d i*−
Ri* = for i = 1,2, … , m (2.14)
d i*− + d i*+
where 0 ≤ Ri* ≤ 1.
The larger the index value, the better the evaluation of the alternative.
Step 7. Rank the preference order or select the alternative closest to 1.
A set of alternatives can now be ranked by the descending order of the value
of Ri* .
x ij
n ij = for i = 1, … , m; j = 1, … , n. (3.2)
m
i=1
(
∑ (x ij ) + (x ij )
2 2
)
[ ]
The interval nij , nij is normalized value of interval x ij , x ij . [ ]
Step 3. Calculate the weighted normalized interval decision matrix.
The weighted normalized values v ij and v ij are calculated in the
following way:
v ij = w j n ij for i = 1, …, m; j = 1, … , n, (3.3)
v ij = w j n ij for i = 1, …, m; j = 1, … , n, (3.4)
n
where w j is the weight of the j-th criterion, ∑w j =1
j = 1.
Step 5. Calculate the separation measures from the positive ideal solution
and the negative ideal solution.
The separation of each alternative from the positive ideal solution is given as*:
∑ (v ) ∑ (v )
n n
2 2
d i+ = +
− v+j (3.7)
ij − v j + ij , i = 1,2, … , m.
j =1 j =1
*
Traditional TOPSIS applied to Euclidean norm is presented here. However, we can also use other metrics.
MULTI-CRITERIA DECISION MAKING MODELS... 213
The separation of each alternative from the negative ideal solution is given as:
∑ (v ) ∑ (v )
n n
2 2
d i− = −
ij − v j + ij − v −j , i = 1,2, … , m. (3.8)
j =1 j =1
xijk = ⎡ x ij , xij ⎤ ,
k k k k
for k − decision maker, where x ij , xij ∈ ℜ , wi ∈ ℜ ,
⎢⎣ ⎥⎦
w1k + w2k + ... + wnk = 1 for k = 1,2, ... , K .
k k
k x ij k x ij
r =
ij k
, r =
ij k (3.10)
max ( x ij ) max ( x ij )
i i
for i = 1, … , m; j = 1, … , n, k = 1,2, … , K.
Step 3. Determine the positive ideal and the negative ideal solutions
for each decision maker.
The positive ideal solution Ak + for k-decision maker has the following
form:
⎧ ⎛ ⎞⎫
⎞⎜ ⎟⎪
A k+
= {
r1k + , r2k + , ... , rnk + } ⎪⎛ k k
= ⎨⎜⎜ max(r ij ) | j ∈ I ⎟⎟, ⎜ min(r ij ) | j ∈ J ⎟⎬. (3.11)
⎪⎝ i ⎠⎜ i ⎟⎪
⎩ ⎝ ⎠⎭
The negative ideal solution Ak − for k-decision maker has the form:
⎧ ⎞⎫
⎞ ⎛⎜
A k−
= {r k− k−
1 , r2 , ... , rn
k−
}= ⎪⎨⎛⎜⎜ min (r k
ij ) |
⎟ k ⎟⎪
j ∈ I , ⎜ max ( r ij ) | j ∈ J ⎟ ⎬,
⎟⎜ i
(3.12)
⎪⎝ i ⎠⎝ ⎟⎪
⎩ ⎠⎭
where I is associated with benefit criteria and J with cost criteria.
Step 4. Calculate the separation measures from the positive ideal solution
and the negative ideal solution.
( )
1/ p
d i
k− ⎛1 m
(
= ⎜ ∑ w kj ⎛⎜ rjk − − r ij
k
) p
+r k−
j −r
k p
ij
⎞⎞
⎟⎟ , i = 1,2, … , m. (3.14)
⎝ 2 j=1 ⎝ ⎠⎠
MULTI-CRITERIA DECISION MAKING MODELS... 215
d ik + =
1 m k ⎛ k+
2 j=1 ⎝
( k 2
) (
k 2⎞
)
∑ w j ⎜ rj − r ij + rjk + − r ij ⎟ , i = 1,2, … , m.
⎠
(3.13*)
d ik − =
1 m k ⎛ k−
2 j=1 ⎝
( k 2
) (
k 2⎞
)
∑ w j ⎜ rj − r ij + rjk − − r ij ⎟ , i = 1,2, … , m.
⎠
(3.14*)
∑ dik+ ∑d k−
i
(3.15)
di*+ = k=1 and di*− = k=1 ,
K K
or
geometric mean:
K K
di*+ = K ∏
k=1
dik+ and di*− = K ∏d
k=1
k−
i . (3.15*)
Table 2
Scale Rating
Very Poor (VP) [0,1]
Poor (P) [1,3]
Medium poor (MP) [3,4]
Fair (F) [4,5]
Medium good (MG) [5,6]
Good (G) [6,9]
Very good (VG) [9,10]
MULTI-CRITERIA DECISION MAKING MODELS... 217
xij =
1 1
K
[ ]
xij + xij2 + ... + xijK , (4.1)
where:
xijs − is the rating value of alternative Ai with the respect to quantitative
criterion C j (crisp or interval) of s − decision maker (i = 1,2, ... , n;
j = 1,2, ... , m; s = 1,2, ... , K ).
Table 3
Scale Weight
Very very low (VVL) 0,005
Very low (VL) 0,125
Low (L) 0,175
Medium low (ML) 0,225
Medium (M) 0,275
Medium hight (MH) 0,325
Hight (H) 0,375
Very Hight (VH) 0,425
Very Very Hight (VVH) 0,475
wr =
K
[
1 1
]
wr + wr2 + ... + wrK , (4.2)
where:
wrs − is the weight of r − criterion for s − decision makers ( r = 1,2, ... , n;
s = 1, 2, ... , K ).
5. Practical application
In this section, to demonstrate the calculation process of the approaches
described, two examples are provided.
Example 1.
A firm intends to choose the best offer (or ranking of the offers) from the set
of proposals submitted by potential contractors. Two experts evaluate five
proposals using several criteria. In order to simplify the calculation, only four
criteria are considered: deadline of payment after receipt the goods (in days),
unitary price (in euro), conditions of warranty and contractor reputation,
C1, C2, C3, C4, respectively. The criteria C1, C3, C4 are benefit criteria,
the greater values being better, and C2 is the cost criterion, the smaller values
are better. Criteria C3, C4 are subjectively evaluated by experts on basic
MULTI-CRITERIA DECISION MAKING MODELS... 219
C1 C2 C3 C4
D1
A1 7 21 F&MP MG
A2 7 24 MG&F F&MP
A3 14 25 MP G& MG
A4 14 26 G MP
A5 21 35 MP &F F& MP
D2
A1 7 21 F&MP MG&F
A2 7 24 MG F
A3 14 25 MP&P G &MG
A4 14 26 MG MP&P
A5 21 35 MP MP
Table 5
Decision matrixes for two decision makers
C1 C2 C3 C4
D1
A1 7 21 4 7
A2 7 24 6 4
A3 14 25 3 8
A4 14 26 9 3
A5 21 35 4 4
D2
A1 7 21 4 6
A2 7 24 7 5
A3 14 25 2 8
A4 14 26 7 3
A5 21 35 3 3
220 Ewa Roszkowska
C1 C2 C3 C4
D1
L VH L ML
D2
ML VVH VL L
Table 7
C1 C2 C3 C4
D1
0,175 0,425 0,175 0,225
D2
0,225 0,475 0,125 0,175
Table 9
Table 10
C1 C2 C3 C4
A1 7 21 4 6,5
A2 7 24 6,5 4,5
A3 14 25 2,5 8
A4 14 26 8 2,5
A5 21 35 3,5 3,5
Table 11
C1 C2 C3 C4
Table 12
Table 13
Calculation results
The separation The separation The relative closeness
of alternatives of alternatives of alternatives
Alternatives Rank
to positive ideal to negative ideal to the positive ideal
one one one
A1 0.250522 0.222860 0.470783 3
A2 0.253325 0.199743 0.440868 4
A3 0.210667 0.255295 0.547889 1
A4 0.235766 0.229436 0.493196 2
A5 0.273169 0.211055 0.435863 5
Example 2.
A firm intends to choose the best offer (or ranking of the offers) from the set
of three proposals submitted by potential contractors. As in example 1, two
experts evaluate each proposal using the same four criteria: deadline of payment
MULTI-CRITERIA DECISION MAKING MODELS... 223
after receipt of the goods (in days), unitary price (in euro), conditions
of warranty and contractor's reputation, C1, C2, C3, C4 respectively. The criteria
C1, C3, C4 are benefit criteria, greater values being better, and C2 is the cost
criterion, smaller values being better. Criteria C3, C4 are subjectively evaluated
by the experts on basic available information and they are considered now
as linguistic variables, and the other criteria are scaled using interval data,
respectively. This is shown in Table 14.
Table 14
2 2
x i1 xi12 xi2 xi22
D2
A1 0 7 20 22 P MP
A2 7 14 22 24 MP P
A3 14 21 24 26 MP MP
Based on Table 2, the decision matrixes of two decision makers are obtained
(Table 15).
Table 15
Table 15 contd.
2 2 2 2 2 2 2 2
x i1 x i1 xi2 xi2 x i3 x i3 xi4 xi4
D2
A1 0 7 20 22 1 3 3 4
A2 7 14 22 24 3 4 1 3
A3 14 21 24 26 3 4 3 4
Based on linguistic variables the evaluation values of attribute weight for each
decision maker can be obtained and the results are shown in Table 16.
Table 16
C1 C2 C3 C4
D1
ML VVH M L
D2
ML VVH VL L
The normalized criteria weights for two decision makers are shown in Table 17.
Table 17
C1 C2 C3 C4
D1
0.196 0.413 0.239 0.152
D2
0.225 0.475 0.125 0.175
Table 18
Table 19
Table 20
A1 0 7 20 22 1 3 2 3,5
A2 7 14 22 24 4,5 6,5 3 4,5
A3 14 21 24 26 3 4 3,5 4,5
226 Ewa Roszkowska
Table 21
C1 C2 C3 C4
Table 22
Table 23
Remark 2. Let us observe that we obtain the same rank order in Case 2
and Case 3.
MULTI-CRITERIA DECISION MAKING MODELS... 227
Concluding remarks
There are a variety of multiple criteria techniques to aid selection
in conditions of multiple-criteria problems. One of them is the TOPSIS method,
where the ranking of alternatives is based on the relative similarity to the ideal
solution, which avoids the situation of having the same similarity index to both
positive ideal and negative ideal solutions.
The TOPSIS method is a practical and useful technique for ranking
and selecting alternatives. In this paper we focused mainly on the concept of the
TOPSIS algorithm for crisp and interval data. An extension of the TOPSIS
technique to a group decision environment was also investigated.
The high flexibility of the TOPSIS concept is able to accommodate
further extensions to make best choices in various situations. Practically,
TOPSIS and its modifications are used to solve many theoretical and real-world
problems. In addition, the preferences of more than one decision makers can be
also aggregated into the TOPSIS procedure. The classical TOPSIS have been
extended according to the requirements of different real-world decision making
problems providing support for interval or fuzzy criteria, interval or fuzzy
weights to modeled imprecision, uncertainty, lack of information or vagueness,
such as TOPSIS with interval data, Fuzzy TOPSIS, Fuzzy AHP and TOPSIS
and group TOPSIS.
In the TOPSIS model based on the theory of fuzzy sets the rating of each
alternative is expressed in triangular or trapezoidal fuzzy numbers, the weight
of each criterion is represented by fuzzy or crisp values, and different
228 Ewa Roszkowska
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