Profit-fairness trade-off in project selection

Autor: Gaia Nicosia, Maurizio Naldi, Andrea Pacifici, Ulrich Pferschy
Přispěvatelé: Naldi, Maurizio, Nicosia, Gaia, Pacifici, Andrea, Pferschy, Ulrich
Rok vydání: 2019
Předmět:
Economics and Econometric
Economics and Econometrics
Fairness
Operations research
Computer science
Strategy and Management
Geography
Planning and Development
Project selection
0211 other engineering and technologies
02 engineering and technology
Management Science and Operations Research
Trade-off
Profit (economics)
Fairne
0502 economics and business
Fairness measure
Pareto optimal solution
Pareto optimal solutions
050207 economics
Integer linear programming formulation
021103 operations research
Profit-fairness trade-off
Project portfolio management
05 social sciences
Strategy and Management1409 Tourism
Leisure and Hospitality Management
Material resources
Settore MAT/09 - Ricerca Operativa
Statistics
Probability and Uncertainty
Settore ING-INF/05 - Sistemi di Elaborazione delle Informazioni
Budget allocation
Zdroj: Socio-Economic Planning Sciences. 67:133-146
ISSN: 0038-0121
Popis: Allocating the overall budget to projects is a major decision for an organization. Taking that decision by looking at the overall profit only may result in an unfair treatment of departments, with some departments overloaded and others underemployed (and dissatisfied). We consider an alternative approach, where the budget allocation is accomplished by aiming at fairness as well as profit. We adopt a knapsack-type Integer Linear Programming formulation to optimize both quality indicators of budget allocation, employing a fairly wide selection of fairness measures. The resulting optimization routines are applied to a representative selection of instances generated through Monte Carlo simulation. We show that high levels of fairness can be achieved for realistic scenarios with only a moderate loss of profit. Large companies appear to be able to achieve a better trade-off between fairness and profit. Striving for fairness also leads to funding more projects, thus increasing the usage level of the organization's human and material resources.
Databáze: OpenAIRE
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