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International Conference
BUILDING
INSIGHTS OF MANAGERIAL ECONOMICS AND ACCOUNTING TOWARDS SUSTAINABLE FOREST
MANAGEMENT May 17 19, 2007
IUFRO Unit 4.05.00 - Managerial Economics and AccountingIUFRO Unit 4.05.01 - Managerial, social and environmental accounting IUFRO Unit 4.05.02 - Managerial economics |
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Biotechnical Faculty, University of Ljubljana, Ljubljana, Slovenia
E-mail lidija.zadnik@bf.uni-lj.si
In order to select the best scenario for sustainable management of a particular forest area from a suggested competing set of forest management alternatives they have to be evaluated according to different criteria. Thus, problems of assessing, ranking, rating and pairwise comparisons of forest management alternatives are multi-criteria decision-making problems. Prior research of these problems mostly neglects an important aspect of information technology, namely the interdependencies that exist among the criteria and indicators designed to evaluate the scenarios and among the decision makers who express their opinion about the most preferred forest management scenario. The objective of this paper is to demonstrate how a combined SWOT, AHP, ANP and group expert interview model can be used as aid in forest management scenarios selection problems that have multiple criteria and interdependence property.
The forest management indicators are first determined according to proposed sustainable scenarios by SWOT (strengths, weaknesses, opportunities and threats) analysis. SWOT can provide a good basis for successful strategy/alternative formulation, but it lacks the possibility of comprehensively appraising the strategic decision making situation. It identifies the factors in strength, weakness, opportunity and threat clusters, but does not find the most significant cluster. In addition, SWOT is mainly based on the qualitative analysis and expertise of the persons participating in the evaluation and decision process (Bhattacharya, 1998). Thus, to yield analytically determined priorities for the SWOT factors and to make them commensurable the Saatys decision analysis method (Saaty, 2005), the analytic hierarchy process (AHP), and its eigenvalue calculation method were integrated with SWOT analysis.
AHP is a comprehensive framework designed to cope with the intuitive, the rational, and the irrational when we make multiobjective and multiactor decisions with and without certainty for any number of alternatives. AHP models a decision-making problem that assumes a unidirectional hierarchical relationship among decision levels. The top element of the hierarchy is the overall goal for the decision model. The hierarchy decomposes to a more specific attribute until a level of management decision criteria is met. The hierarchy is a type of system where one set of entities influences another set. However, the use of AHP means that the models are still lacking in that they do not consider important interactions among and between decision-making levels, it has been much used with real forest management problems because it is very simple and easy to understand, so decision-makers feel comfortable with it.
ANP (analytic network process) (Meade and Sarkis, 1999) is a general form of AHP. It allows relationships among the decision levels and among the attributes. It does not require strictly hierarchical structure. Two-way arrows represent interdependencies among attributes or attribute levels. The directions of the arrows signify dependence. Arrows emanate from an attribute to other attributes that may influence it. The relative importance of the impacts on a given element is measured on a ratio scale similar to Saatys AHP 9-point scale. ANP is handling interdependencies among elements by obtaining the composite weights through the development of so-called supermatrix. The supermatrix concept is explained as a parallel to the Markov chain process. We collect the data for supermatrix development by group expert interview.
Application of the presented model deals with three forest management scenarios in Primorska region, Slovenia.
