Risk Assessment and Decision-Making Study Based on PCA and EWM-TOPSIS Hierarchical Interaction Model

This paper introduces a risk assessment model that incorporates three key dimensions of risk evaluation. Utilizing PCA, this model segments risks into four classifications based on their severity, ranging from significant to poor effects. The practical application of this model is demonstrated through its implementation in two distinct scenarios, revealing its effectiveness in identifying varying levels of risk impact. And then, this paper progresses to delineate six critical factors influencing decision-making, identified through the analysis of principal components via PCA. These factors, in conjunction with four evaluative metrics, establish the EWM-TOPSIS hierarchical interactive model. By employing PCA for risk segmentation and the EWM-TOPSIS model for detailed decision-making analysis, this research offers a sophisticated toolset for conducting risk assessments and making informed decisions across various domains.