A Decision Support Framework based on FCM for Selecting Key Performance Indicators

Abstract

One of the main issues that firms encounter in building an effective performance measurement system (PMS) is selecting the most relevant performance indicators, often known as key performance indicators (KPI). These indicators should be chosen according to the company’s objectives, strategies, and key success factors. On the other hand, in a production system, KPIs are not independent and may have inherent interactions with each other. These interactions should be investigated and taken into account in the KPI selection process. The goal of this research is to present a decision support framework based on a Fuzzy Cognitive Map (FCM) for guiding decision-makers in the selection of KPI. The model is based on the idea that KPI may be assessed and chosen based on their impacts on the company’s strategic objectives. In addition, the model allows for the consideration of different causal interdependence between the KPI.