Study the areas performance evaluation of regions at Tehran municipality by GAHP- VIKOR techniques

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1 Applied mathematics in Engineering, Management and Technology 3() 205: Study the areas performance evaluation of regions at Tehran municipality by GAHP- VIKOR techniques Samira Zarei * Department of Accounting, West tehran Branch, Islamic Azad University, Tehran, Iran * Corresponding author; zarei.s.90@gmail.com Ghodratolah Talebnia 2 2 Department of Accounting, Science and Research Branch of Tehran, Islamic Azad University, Tehran, Iran Abstract In this study, performance evaluation of the Tehran municipality regions has done by GAHP-VIKOR techniques based on three areas. GAHP technique was implemented and used to find the importance coefficients in the VIKOR technique. Three areas for ranking Tehran municipality regions were finance, Growth and development and citizens. Finally, rankings done based on these areas and based on total areas were compared with each other using the Spearman correlation test. Results showed that there is significant relationship between rankings based on finance area and total areas in 99% confidence level. Also, showed that there is significant relationship between rankings based on Growth and development area and total areas in 95% confidence level and there is no significant relationship between rankings based on citizens area and total areas. Hence, results showed that final ranking is very impressive rankings based on index of financial areas. Keywords: ranking, VIKOR, GAHP, finance area, Growth and development area, citizens area..introduction Municipality refers to an area in where an association of city has capability to perform policy power and presents the local governmental services to the public (Qadri, 2008) In terms of public view, municipality is an organization that offers municipal services and receives the cost of those services (Kamyar 48, 2006). Kenfac, Nekoumanesh & Yang (203) during the study entitled "Factors affecting organizational performance: A research study on the four municipalities in Sweden investigated and evaluated the municipality organization in Sweden. kilic (20) in Turkey used fuzzy hierarchical analysis evaluate the performance system of municipalities. Pollanen (2005) in a research based on 334 senior executives in Canadian municipalities examine how to evaluate the performance based on external and management reporting. JOSTEIN (2004) also in a research attempts to reconcile the balanced scorecard model in Larvik municipality and thereby assess the Larvik municipality organization. In this research, it is tried to evaluate the effective performance of Tehran municipality regions by ranking them using Multiple Attribute Decision Making techniques such as GAHP VIKOR. Compromise ranking method VIKOR was developed and presented by Opricovic (998) as well as Opricovic, Tzeng (2004). VIKOR and topsis methods were compared (Opricovic, Tzeng, 2007). According to Opricovic and Tzeng, the values normalized by vector normalization and applied in topsis may depend on the evaluation unit. Moreover, these two methods introduce different aggregating functions for ranking. The considered compromise ranking method introduces a concept of relative importance of the criteria and a balance between total and individual satisfaction, while the distances from the ideal and negative-ideal points in the technique for order preference by similarity to ideal solution are simply summed, without considering their relative importance. Therefore, the authors of the current paper suggested applying the VIKOR method for ranking redevelopment alternatives of derelict buildings. In (Antucheviciene, Zavadskas, 2008) a case study was presented and redevelopment problems relating to derelict buildings in Lithuanian rural areas were analyzed by the proposed techniques. The VIKOR-F method has been developed to solve fuzzy multiple criteria problem with conflicting and noncommensurable criteria (Opricovic, 2007). Also in recent years there were some more publications where VIKOR or VIKOR-F was applied for some management decisions, for example supplier selection under fuzzy environment was held in (Sanayei et al., 200; Sasikumar, Haq, 20). However, combination of VIKOR with some other MCDM methods has been more often applied and handling of a proper 43

2 MCDM technique has been discussed. Ginevicius et al. (2008) applied COPRAS, topsis and VIKOR and some other methods for analysing alternative solutions of external walls and wall insulation. Correlation coefficients were calculated between final values of alternatives obtained by SAW (Simple Additive Weighing) and other MCDM methods under consideration. Selection of proper methods considering their advantages and disadvantages in qualitative manner was discussed for multiple criteria evaluation of real estate projects efficiency in (Ginevicius, Zubrecovas, 2009). Also for sustainable development problems Ginevicius, Podvezko (2009) used multiple criteria evaluation methods that took into consideration the major aspects of economic, social and environmental development of the region as well as multidimensional character of the development criteria. 2.Materials and methods First, we explain the GAHP - VIKOR techniques used in the study. Then, Research hypotheses are expressed, and also, the research method used in this research will describe. 3.Analytical Hierarchy method Analytical hierarchy method is built with structural and functional hierarchy classification based on paired comparisons of priorities that decision maker pays to draw a decision hierarchy tree, which shows the compared factors and adversary alternatives evaluated in decision and then paired comparisons take place. These comparisons specify the weight of each factor along with adversary alternatives. (Rahimi, 2006, p 36) The steps of this method are as follows: Suppose we have n alternative and m criterion for evaluating them.. Determination of criterions 2. Paired comparisons of two adversaries for each criterion and formation of adversaries n * n matrix, that its elements suggests the relative superiority of one over the other. 3. Obtain the weight of each adversary for this criterion that is a vector, which this is done with a series of row-column operations on matrix of the previous step, and use eigenvector method and a vector is obtained which the sum of its elements is and the amount of its i-th element shows the weight of i-th adversary for this criterion. 4. Perform steps to 3 for all criterions, so that finally, the m-vector n-tuple is obtained and an mxn matrix is formed by putting them together. 5. Paired comparisons of criterions themselves and obtain the weight of each of them from matrix of criterions. 6. multiplying the vector of criterions weight in matrix mxn and finally obtain the final weight of each adversary. 7. Compatibility test for lack of inconsistency in assigning numbers of projects superiority in comparison with criterions. (Bentes & et al, 202) In this study, we want to use from gregarious AHP technique that is enjoying the views of different people to find more complete and optimal results. Results of gregarious AHP technique used to perform vikor technique in order to use for importance coefficients in this technique. 4.vikor Technique Vikor method determines the ranking list of compromise and compromise solution based on certain measures from "closeness" to "ideal" solution (Alvandi & etal, 203). Vikor method for ranking alternatives described below.. Forming the decision matrix 2. Determine the vector of criteria weight 3. Determine the positive ideal and negative ideal point: it is known that the best X * j and worst X ˉ j values of all criterion functions, where j =, 2,..., n. If the j-th criterion represents profit, then X * j = maxf ij and f ˉ j = minf ij. 4. Calculate the utility value for each alternative (R) and regret value for each alternative (S) 44

3 5. Calculate Vikor index (Q): 6. Rankings of alternatives S w f f R w f f n * * i ij i ij j i ; max * j i i * i fi fi fi fi S j S Rj R Qj v ( v) * * S S R R Alternatives are sorted based on the values of S and R and Q and descendingly. The results ranked in three lists. Alternative a' is recommended as compromise solution in a way that according to the Q value (minimum) and considering two following conditions is ranked as the best. First condition: Acceptable advantage of Q (A ")-Q (A ') DQ a'' alternative with second position in the Q ranking list The second condition: Acceptable stability in decision making of alternative a' also should has the highest rank in the ranking list of S or R or both. Such a compromise solution stays in the decision making process. If either condition is not established, a set of compromise solutions are suggested:. Alternatives, a "and a ', if only the second condition does not established. 2. Alternatives am and a a''... "'and a' If the first condition does not established. Q (A m)-q (A ') So when a value is larger than 0/5, index leads to the compatible majority and when its value is less than 0/5, the index shows the negative attitude of the majority. In general, when the value is equal to 0/5, it represents the compromise view of evaluation experts. 5.Areas of ranking with vikor: In this research, in the implementation of Vikor techniques used from the variables in the three following areas: - Financial areas: A. Liquidity ratios: B. quick ratio: cash inventories + receivables / current liabilities Current ratio: current assets / current liabilities The ratio of current assets: current assets / total assets B. Activity Ratios: Asset turnover ratio: Net operating income / total assets Receivables collection period (in days): Average Receivables / Net operating income * 365 Current asset turnover: Net operating income / working capital C. Investment ratios: D. the ratio of assets to equity: Fixed assets / equity The ratio of total debt: total debt / equity The ratio of debt to equity: current debt / equity The ownership ratio: equity / total assets D. Profitability ratios: Return on Sales: net profit / net sales Return on equity: net profit / equity Return on assets: net profit / total assets Return on working capital: net profit / working capital 45

4 2 - Growth and development areas: The income share of each region from the total income of the municipality The share of expenditure of social-cultural activities of regions in all municipality regions Number of staff with graduate level to the all staff in the municipality regions The ratio of education expenditure to total income of regions 3 - citizens area: Number of cultural centers in the municipality regions (including museums, cultural centers, galleries and libraries and learning centers) The number of sports centers in the municipality regions The number of gardens and parks built in the Tehran municipality regions Area of gardens and parks in municipality regions (thousand square meters) The share of transportation and traffic services in municipality regions The ratio of old texture (old textures area / area of region) The amount of municipal waste collected by the Tehran municipality regions (ton) 6.The research hypothesis According to previous materials, the research hypothesis is formulated as follows: Hypothesis : There is a significant relationship between performance evaluation of municipality regions by VIKOR Based on total indicators and VIKOR Based on the indicators of Finance. Hypothesis 2: There is a significant relationship between performance evaluation of municipality regions by VIKOR Based on total indicators and VIKOR Based on the indicators of internal Growth and development. Hypothesis 3: There is a significant relationship between performance evaluation of municipality regions by VIKOR Based on total indicators and VIKOR Based on the indicators of citizens. Data needed to test the research hypothesis are collected from financial statements and periodic reports of 22 regions of Tehran municipality in fiscal year 203. In implementing techniques of AHP, VIKOR are used from multiple decision-making software as follows: B. implementing GAHP technique using Expert Choice v software C - implementing VIKOR technique using VIKOR technique solution software and EXCEL spreadsheet D - implementing the statistical Spearman test using SPSS software 7.Results First based on the results of GAHP technique, we calculate the importance coefficients and weight of each variable. Chart indicates the importance coefficients for each of research variables: 46

5 Chart : the importance coefficients of research variables Evaluation indicates of Tehran Municipality Regions citizens area: 0.24 Internal growth and development areas: financial area: 0.73 Number of cultural centers of the municipality regions: 0.0 The share of income: 0.58 Profitabil ity: 0.56 Investment: 0.05 Activity: 0.02 Liquidity : The number of sports centers of municipality regions: 0.6 The number of gardens and parks of municipality regions: 0.24 The area of gardens and parks of municipality regions: 0.34 The share of transportation and traffic services in regions: 0.09 The ratio of old texture: 0.04 The share of expenditure of socialcultural activities: 0.26 Number of employees: 0.2 Education cost to total income ratio: 0.06 Return on Sales: 0.42 return on equity: 0.5 return on assets: 0.7 Return on working capital: 0.27 Assets to equity: 0.56 Total Debt Ratio: 0.9 Debt to Equity: 0.4 ownership ratio: 0. Asset turnover ratio: 0.32 Receivables collection period: 0.59 Current asset turnover: 0.09 quick ratio: 0.64 Current Ratio: 0.23 The ratio of current assets: 0.3 The amount of collected wastes: 0.03 Therefore, after using GAHP technique, Vikor index calculated for each of the regions indicates the efficiency of that region. Rating of every region calculated based on this index. Table are showed Vikor index Entitled Q : Table Vikor index based on for 3 area and total of them Vikor index of regions based on. citizens internal Growth and development Finance all area Municipality regions

6 charts,2 and 3 related to "Compare these four options together for Vikor index, you will see below.2 Chart 2- compare finance area & all area Vikor index of regions based on. all area Vikor index of regions based on. Finance Chart 3 - compare Growth and development area & all area Vikor index of regions based on. all area Vikor index of regions based on. internal Growth and development Chart 4 - compare citizens area & all area Vikor index of regions based on. all area Vikor index of regions based on. citizens 48

7 As can be seen, Figure related to "compare finance area & all area" have the Similar trends with each other and Figures 2 and 3 are different. In the following, the findings related to the rank of each region give in Table 2. Table 2 Rank of regions based on Vikor for 3 area and total of them Rank of regions based on. Municipality internal Growth and all citizens Finance regions development area Testing the hypothesis To test the research hypothesis using the Spearman correlation test, we investigate the relationship state between ranking done by VIKOR at three areas and total areas. According to Table 2, showed the result of test hypothesis. No. hypothesis Hypothesis Hypothesis 2 Hypothesis 3 Table 3: Spearman Correlation Coefficient Test Results Spearman Variables correlation result coefficient Acceptance of the Vikor total - vikor finance hypothesis at 99% Vikor total -vikor Growth&development confidence level Acceptance of the hypothesis at 95% confidence level Vikor total-vikor citizen reject the hypothesis 9.Conclusions 49

8 Performance evaluation of the Tehran municipality regions has taken place by ranking them using Multiple Attribute Decision Making techniques include VIKOR technique at three areas. In this regard, by introducing three main areas about evaluation criteria of Tehran municipality regions, we try to rank them using Vikor technique based on three ereas. To find the importance coefficients in the VIKOR method is used the views of experts and GAHP techniques. Finally, rankings done with these techniques were compared with each other using the Spearman correlation test. In addition, the ranking based on all index were compared with ratings based on each of the areas of research by using Spearman statistical test, which results showed that final ranking is very impressive rankings based on index of financial areas. References Alvandi Mohsen, Safar Fazli, Gholamreza Kordestani & Reza Rezaei,203, Evaluation and ranking the companies of auto and spare parts industry accepted in Tehran Stock Exchange using FAHP and VIKOR, International Research Journal of Applied and Basic Sciences, Vol, 5 (7): Antucheviciene, J., Zavadskas, E. K. (2008), Modelling Multidimensional Redevelopment of Derelict Buildings. International Journal of Environment and Pollution 35(2/3/4), Bentes, Alexandre Veronese & et al, (202). Multidimensional assessment of organizational performance: Integrating BSC and AHP. Journal of Business Research, 65, JOSTEIN ASKIM, 2004, PERFORMANCE MANAGEMENT AND ORGANIZATIONAL INTELLIGENCE: ADAPTING THE BALANCED SCORECARD IN LARVIK MUNICIPALITY, International Public Management Journal, Vol. 7, No. 3. Gedoc Sintset Kenfac, Sahand Nekoumanesh & Mingyan Yang, 203. Impacts on Organization's Performance, A Qualitative Study of Four Swedish Municipalities, linaeuse university, school of business & economic, Bachelor Thesis, Spring 203. Ginevicius, R., Zubrecovas, V. (2009), Selection of the Optimal Real Estate Investment Project Basing on Multiple Criteria Evaluation Using Stochastic Dimensions. Journal of Business Economics and Management, 0(3), [25] Ginevicius, R., Podvezko, V. (2009), Evaluating the Changes in Economic and Social Development of Lithuanian Countries by Multiple Criteria Methods. Technological and Economic Development of Economy 5(3), [26] Ginevicius, R.; Podvezko, V., Raslanas, S. (2008), Evaluating the Alternative Solutions of Wall Insulation by Multicriteria Methods. Journal of Civil Engineering and Management 4(4), Huseyin selcuk kilic, 20. A FUZZY AHP BASED PERFORMANCE ASSESSMENT SYSTEM FOR THE STRATEGIC PLAN OF TURKISH MUNICIPALITIES, INTERNATIONAL JOURNAL OF BUSINESS AND MANAGEMENT STUDIES, Vol. 3, No 2. Kamyar, GR. (2006). Municipal and urbanism Law, Tehran, Majd Press Opricovic, S. (998), Multi-criteria Optimization of Civil Engineering Systems. Belgrade, Faculty of Civil Engineering. Opricovic, S., Tzeng, G. H. (2007), Extended VIKOR Method in Comparison with Outranking Methods. European Journal of Operational Research 78(2), Pollanen, Raili M. 2005, Performance measurement in municipalities: Empirical evidence in Canadian context, International Journal of Public Sector Management, Vol. 8, No., pp Qaderi, A. (2008). Identify barriers to the development of geographic information systems in municipal services area of Shiraz Municipality and offer executive solutions. MA thesis in urban management. College of Economics and Management. Islamic Azad University of Science and Research Branch of Tehran. Rahimi, GH (2006), "Performance evaluation and continuous improvement of the organization", Tadbir Journal, No. 73. Sanayei, A., Mousavi, S. F., Yazdankhah, A. (200), Group Decision Making Process for Supplier Selection with VIKOR under Fuzzy Environment. Expert Systems with Applications 37(), Sasikumar, P., Noorul Haq, A. (20), Integration of Closed Lloop Distribution Supply Chain Network and 3PRLP Selection for the Case of Battery Recycling. International Journal of Production Research 49(),