TOPSIS Algorithm with Optimal Weights and its Application on Enterprises' Performance Evaluation

Abstract

TOPSIS (Technique for Order Preference by Similarity to Ideal Solution) algorithm is a typical comprehensive evaluation method for ranking the alternatives by similarity to ideal solution. In traditional TOPSIS algorithm, the weights for each evaluation attribute are obtained by questionnaires or expert investment, which reflects the different important degree of each attributes. To overcome the subjective influence on weights, TOPSIS algorithm with optimal weights was proposed in this paper, which calculates the optimal weighting scheme for alternatives by DEA (Data Envelopment Analysis) multiplier model. Our proposed TOPSIS algorithm can identify the distance ratio for each alternative with optimal weights.