A Novel Approach to Scenario Assessment and Selection

Scenario planning is an effective and common tool that provides organizations with future insights and supports their strategic planning process by identifying alternative scenarios. Developing scenarios involves combining various future events, which require assessing and selecting a manageable number of distinct scenarios based on different criteria. Studies in the literature typically carry out this process relying on only a few criteria. Moreover, none of them considers multiple criteria simultaneously and they completely disregard the interaction among criteria. To address these issues, a novel approach that assesses scenarios through the simultaneous consideration of multiple criteria and their interactions is proposed. For the aggregation of the assessments, Choquet integral is used. Also, a new binary integer programming model that simultaneously accounts for multiple constraints is developed to select a manageable number of scenarios covering a wide range of distinct futures. The model allows complete flexibility in choosing the weights in the objective function. The approach is demonstrated for a manufacturing company to support its strategies for warehouse operations. A comparative analysis and the findings of the application indicate that the proposed approach effectively reduces possible loss of information and improves the comprehensiveness and accuracy of the scenario assessment and selection process.