Cumulative Prospect Theory Coupled with Multi-Attribute Decision-Making for Path Selection in Hazardous Materials Road Transportation

Path selection for the transport of hazardous materials (Hazmats) is a multi-facet decision problem that needs to account for multiple factors such as accident risk as well as transportation cost. Most existing literature has modeled the risk of Hazmats transportation as the product of accident loss, and its probability-based expected utility theory, however, could be problematic since such a risk definition does not necessarily reflect the real perceived risk by the decision-maker. This article proposes a novel approach to the path selection of Hazmats transportation based on the cumulative prospect theory (CPT). Specific steps in the decision of path selection are first laid out in the framework of CPT. Value (Loss) functions of accident in Hazmats transportation are then derived, together with the decision weighting function reflecting accident probabilities. For illustration, a case study is conducted using transportation data from a Hazmats transportation firm in Shanghai. Comparisons of path selections among the newly proposed approach, the existing methods based on expected utility theory, and the actual outcome from the decision-makers clearly indicate the superior performance of the proposed method. The results will enhance the safety level of road transportation of Hazmats.