Inequity averse optimisation in operational research

Özlem Karsu, Alec Morton

Research output: Contribution to journalArticle

31 Citations (Scopus)

Abstract

There are many applications across a broad range of business problem domains in which equity is a concern and many well-known operational research (OR) problems such as knapsack, scheduling or assignment problems have been considered from an equity perspective. This shows that equity is both a technically interesting concept and a substantial practical concern. In this paper we review the operational research literature on inequity averse optimisation. We focus on the cases where there is a tradeoff between efficiency and equity. We discuss two equity related concerns, namely equitability and balance. Equitability concerns are distinguished from balance concerns depending on whether an underlying anonymity assumption holds. From a modelling point of view, we classify three main approaches to handle equitability concerns: the fi…rst approach is based on a Rawlsian principle. The second approach uses an explicit inequality index in the mathematical model. The third approach uses equitable aggregation functions that can represent the DM’s preferences, which take into account both efficiency and equity concerns. We also discuss the two main approaches to handle balance: the …first approach is based on imbalance indicators, which measure deviation from a reference balanced solution. The second approach is based on scaling the distributions such that balance concerns turn into equitability concerns in the resulting distributions and then one of the approaches to handle equitability concerns can be applied. We briefy describe these approaches and provide a discussion of their advantages and disadvantages. We discuss future research directions focussing on decision support and robustness.
LanguageEnglish
Pages343-359
Number of pages17
JournalEuropean Journal of Operational Research
Volume245
Issue number2
Early online date20 Feb 2015
DOIs
Publication statusPublished - 1 Sep 2015

Fingerprint

Equity
Operations Research
Optimization
Agglomeration
Scheduling
Mathematical models
Aggregation Function
Industry
Knapsack Problem
Anonymity
Assignment Problem
Decision Support
Inequity
Operations research
Scheduling Problem
Deviation
Trade-offs
Classify
Scaling
Mathematical Model

Keywords

  • inequity
  • optimization
  • multicriteria decision making
  • equitable efficiency
  • fairness

Cite this

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Inequity averse optimisation in operational research. / Karsu, Özlem; Morton, Alec.

In: European Journal of Operational Research, Vol. 245, No. 2, 01.09.2015, p. 343-359.

Research output: Contribution to journalArticle

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