A comprehensive approach for the selection of a portfolio of interdependent projects. An application to subsidized projects in Spain. (April 2018)

• Record Type: Journal Article
• Authors: Alvarez-García, B.; Fernández-Castro, A.S.
• Is Part Of: Computers & industrial engineering. Volume 118(2018)
• Page Start: 153
• Page End: 159
• Publication Date: 2018-04
• Subjects: Portfolio selection -- Interdependent projects -- Fuzzy dependences -- Fuzzy Delphi -- Multi-objective interactive approach -- Investment analysis; Engineering -- Data processing -- Periodicals; Industrial engineering -- Periodicals; 620.00285
• DOI: 10.1016/j.cie.2018.02.025
• Languages: English
• ISSNs: 0360-8352

Abstract

Highlights: A fuzzy multi-objective interactive model to select project portfolios is presented. Special attention is paid to the dependencies existing among the projects. The model is a comprehensive and flexible tool designed from a realistic point of view. The model exploits the expertise of individuals who can express their opinions in a subjective way. The model is applied to a large set of projects aimed at the development of coal mining areas in Galicia (Spain). Abstract: Interdependency is an ubiquitous concept in project portfolio selection, both at the firm and industry levels. However, despite the wide acceptance of this fact, there is a remarkable scarcity of models involving interdependencies amongst non-financial investments. This paper presents a flexible model developed to address the scarcity of interdependency models: a fuzzy interactive multi-objective model, based on the reference point approach, which elicits the evaluation of interdependencies from a group of experts in a natural way. The model is presented in a sequential way, to highlight its contributions. Then, it is applied to solve a real portfolio selection problem, consisting on a large set of investment projects eligible for a subsidy program. The portfolio selected using the model achieves a sharp reduction in the deviations from objectives compared to the portfolio originally selected by the granting authorities.