Incorporating balance concerns in resource allocation decisions: A bi-criteria modelling approach

• We propose a means to handle balance concerns alongside efficiency concerns in allocation problems.
• We provide a bi-criteria framework to think about trading balance off against efficiency.
• We discuss ways to measure the deviation from an allocation which the DM considers as balanced.
• We define and classify imbalance indicators.
• We propose formulations and algorithms which provide insight to the decision makers in general resource allocation settings.

We consider resource allocation problems where inputs are allocated to different entities such as activities, projects or departments. In such problems a common goal is achieving a desired balance in the allocation over different categories of the entities. We propose a bi-criteria framework for trading balance off against efficiency. We define and categorise indicators based on balance distribution and propose formulations and solution algorithms which provide insight into the balance-efficiency tradeoff. We illustrate our models by applying them to the data of a portfolio selection problem faced by a science funding agency and to randomly generated large-sized problem instances to demonstrate computational feasibility.