The renewal of assets using a tool to aid decision making

Abstract

Purpose

The purpose of this paper is the application of a tool to assist the multi-criteria decision-making process for selecting an asset for a company in the metallurgical industry which manufactures metal parts for diverse industries.

Design/methodology/approach

This investment, complex due to the commitment of resources it requires, has been made with the assistance of decision-making methodologies, specifically versions I and IV of the ELECTRE method.

Findings

This model of multi-criteria decision making has been chosen over other models because it offers the possibility of including technical and economic decisions so they can be analyzed simultaneously, therefore the decision is not based solely on financial aspects. Many companies base their decisions exclusively on financial returns, however in this case it is also appropriate to include the technical parameters, since the asset being replaced is the most important asset of the company.

Originality/value

Applying version I of the methodology, the optimal technical configuration of the asset will be analyzed based on the features requirements, all of which are among options available in the market. Once a subset of technically and economically viable alternatives has been defined, version IV will be applied and a ranking of the alternatives from the best to the worst will be obtained and, based on this ranking, the final decision will be made.

Citation

Muñoz-Porcar, A., Alonso-Nuez, M.J., Flores-García, M. and Duret-Solanas, D. (2015), "The renewal of assets using a tool to aid decision making", Management Decision, Vol. 53 No. 7, pp. 1412-1429. https://doi.org/10.1108/MD-11-2014-0633