Integration of Fuzzy Cognitive Maps and AHP-TOPSIS for Prioritizing and Selecting Risk Mitigation Strategies in Retail.

Abstract

The high complexity and interdependence of operational risks in the retail sector pose a significant challenge to traditional management approaches. This article suggests a way of making decisions when multiple aspects must be considered, such as the likelihood of events occurring and their interdependencies. The goal is to classify risks, while also examining how they are related and what actions can be taken to mitigate them. This is approached using three methods: (1) developing maps that show how factors may change and influence one another; (2) applying a method that helps determine which risks are more important than others based on expert judgments; and (3) employing a method that evaluates different strategies for dealing with risks according to their strengths and weaknesses. The AHP results indicated that the most critical risks for the company were financial loss (29.2%) and reputational damage (29.2%). Financial and reputational risks were identified as the main concerns according to AHP, with a consistency ratio of 5.2%, meaning that the judgments were coherent. FCM showed that some seemingly minor internal issues could trigger several other problems with substantial impact on the company. The TOPSIS ranking demonstrated that the best strategy was to use technology to enhance the supply chain, with a score of 0.75, significantly higher than the other alternatives. These methods support senior management in identifying and addressing the most significant risks, deciding where and how to act more effectively, and making strategic decisions that align with the actual business context.