Comparing Methodologies for Ranking Alternatives: A Case Study in Assessing Bank Financial Performance
Received: 12 August 2025 | Revised: 28 August 2025 | Accepted: 11 September 2025 | Online: 10 October 2025
Corresponding author: Vu Quang Minh
Abstract
The robustness of bank performance rankings is examined by combining three Multi-Criteria Decision-Making (MCDM) procedures. Probability, Technique for Order Preference by Similarity to Ideal Solution (TOPSIS), and Root Assessment Method (RAM), with five objective weighting schemes: Equal, Entropy, Method based on the Removal Effects of Criteria (MEREC), LΟgarithmic Percentage Change-driven Objective Weighting (LOPCOW), and Symmetry Point of Criterion (SPC). A panel of nineteen banks is evaluated on seven financial criteria (five benefit-type and two cost-type) following consistent cost/benefit normalization. For each weighting set, the criterion weights are computed and applied within all three ranking procedures; robustness is quantified via a cross-scenario rank-dispersion score (Rscore) and pairwise Spearman’s ρ. The results indicate strong concordance at the extremes of the ordering: the same alternatives occupy the top and bottom positions across methods and weights, whereas mid-range positions exhibit material sensitivity to the choice of the weighting scheme. Across Probability, TOPSIS, and RAM, Entropy yields the lowest Rscore (highest stability), while SPC yields the highest Rscore (lowest stability). These findings demonstrate that the selection of objective weights substantially influences the intermediate ranks and identify Entropy as a stability-oriented choice for banking assessments. The study documents all preprocessing and evaluation steps to support reproducibility and outlines extensions involving hybrid objective-subjective weighting and bootstrap-based uncertainty analysis.
Keywords:
bank financial performance, weighting, MCDMDownloads
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Copyright (c) 2025 Vu Quang Minh, Dong Trung Chinh, Pham Huong Quynh, Nguyen Thi Thu Hien, Vu Minh Quang
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