1. The concept of COSIMA supported by
a decision conference
Ph.D. student, M.Sc.
Michael Bruhn Barfod

2. Introduction
• A conventional CBA provides decision-makers with a monetary
assessment
• A final decision making will in many cases depend on other aspects
besides the monetary ones
– A methodology is needed for the assessment of other more “soft”
aspects
• A methodology is set out based on keeping the economic information
intact at all times
• The resulting composite model provides a theoretical argument for
adding non-monetary MCA-impacts to the monetary CBA-impacts
2 DTU Transport, Technical University of Denmark Presentation 9/1-2008

3. Principles for composite modeling
assessment (I)
• Composite model for assessment (COSIMA)
– Consists of a CBA-part and a MCA-part
– Requires that MCA is additive to CBA
TV ( Ak ) = CBA( Ak ) + MCA( Ak )
– In a situation where the investment in alternative Ak equal to the
investment cost Ck is not feasible seen from CBA, i.e. gross value
CBA(Ak)<Ck, then the investment can be justified by the wider
COSIMA examination if TV(Ak)>Ck or, if expressed as a total rate
of return, TRR(Ak)>1
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4. Principles for composite modeling
assessment (II)
• It is convenient to express the feasibility by the total rate of return TRR(Ak)
from the investment cost Ck
TV ( Ak ) 1 ⎛ I ⎡ J ⎤⎞
⎜ ∑ Vi ( X ik ) + α ⋅ ⎢∑ w j ⋅ VF j (Y jk )⎥ ⎟
TRR ( Ak ) = = ⋅
Ck C k ⎜ i =1
⎝ ⎣ j =1 ⎦⎠
⎟
I
∑w
i =1
j =1 and 0 < wj < 1
– Xik is the quantity of impact i for alternative k
– Vi(Xik) is the value in monetary units for the CBA impact i for alternative k
– α is a indicator that expresses the model set-up’s trade-off between the CBA and
the MCA part
– wj is a importance weight for criterion j
– Yjk is a parameter value for MCA criterion j for alternative k
– VFj(Yjk) is a value-function score for MCA criterion j for alternative k
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5. MCA methodologies
• The following techniques are proposed for the COSIMA
framework:
– For criteria assessment (rankings) - wj
• Swing weights
• ROD weights
– For attribute assessment (pair wise comparisons) - VFj
• AHP
• REMBRANDT
• During the decision process arguments for all assessments made should
be written down in an protocol for later review
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6. The results of COSIMA (illustrative example)
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7. Structuring the decision process
• An important issue is to structure the decision making
process in a way so that all information and all opinions
are taken into account
• Problem focus as an activity is conducted before the
assessment is started (what is the problem?, who own the
problem? and what alternative solutions are there?)
– Assures a wide understanding of the
assignment/problem
• Both for the participants and the facilitator(s)
• Enables the facilitator(s) to perform the
preparatory work
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8. The decision conference (I)
• The purpose is to enable a group to make an informed decision
• Consists of the 3 concepts: decision analysis, group processes and
information technology
• The decision conference can be seen as a strategic tool that can be
used for long-term complex decisions
• A group of persons involved in the decision making are brought
together under the guidance of a facilitator who – assisted by a
decision analyst – collects input for the decision model
• The group should be composed in such a way that all perspectives on
the issue are covered
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9. The decision conference (II)
A decision conference can be structured around the following 7
steps:
1. Decision on the basis of CBA
2. Identification of supplementing criteria
3. Ranking of supplementing criteria
4. Scoring of alternatives
5. CBA/MCA trade-off
6. Scenario analysis
7. Sensitivity/risk analysis
The steps can differ depending on the assessment task in hand.
It is the facilitators responsibility to structure the decision
conference in a suitable way.
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10. Summary concerning COSIMA
• The COSIMA approach
– The methodology can include all important impacts determined by
the decision-makers
– The results are relatively easy to interpret and make use of
– The process and findings are transparent when the choices to be
made by the decision-makers are well presented and motivated
• Different techniques can be applied to the model framework
– Dependent of the level of knowledge of the appraisal task
– Dependent of who is doing the assessments (specialists or ”basic
knowledge” persons)
– Dependent of the timeframe available
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11. Summary concerning the decision
conference
• Aim
– To include and consider all critical aspects of the issue
– To assess and implement them in the decision process
in a transparent and systematic way
• The decision conference
– Provides the decision makers with an opportunity to
influence the final result
– Validates the final decision for the participants
– Provides a more thorough and robust result
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12. Thank you!
Questions and/or comments
are very welcome
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