Multicriteria Decision
Many decision problems are multicriteria, not single
criteria.
There are many multicriteria decision making techniques,
including:
AHP Method
9/10/2015
Goal programming
Score model
Analytic hiearchy process (AHP)
Analytic network process
Dr. Yuhong Wang, Ph.D, PE
Analytic Hierarchy Process
Analytic Hierarchy Process
The Analytic Hierarchy Process (AHP), is a
procedure designed to quantify managerial
judgments of the relative importance of each of
several conflicting criteria used in the decision
making process.
Step 1: List the Overall Goal, Criteria, and Decision
Alternatives
------- For each criterion, perform steps 2 through 5 -------
Step 2: Develop a Pair-wise Comparison Matrix
Rate the relative importance between each pair
of decision alternatives. The matrix lists the
alternatives horizontally and vertically and has the
numerical ratings comparing the horizontal (first)
alternative with the vertical (second) alternative.
Ratings are given as follows:
. . . continued
Analytic Hierarchy Process
Step 2: Pair-wise Comparison Matrix (continued)
Compared to the second
alternative, the first alternative is:
extremely preferred
very strongly preferred
strongly preferred
moderately preferred
equally preferred
Numerical rating
9
7
5
3
1
Analytic Hierarchy Process
Step 3: Develop a Normalized Matrix
Divide each number in a column of the pair-wise
comparison matrix by its column sum.
Step 4: Develop the Priority Vector
Average each row of the normalized matrix.
These row averages form the priority vector of
alternative preferences with respect to the particular
criterion. The values in this vector sum to 1.
Analytic Hierarchy Process
Step 2: Pair-wise Comparison Matrix (continued)
Intermediate numeric ratings of 8, 6, 4, 2 can be
assigned. A reciprocal rating (i.e. 1/9, 1/8, etc.) is
assigned when the second alternative is preferred to
the first. The value of 1 is always assigned when
comparing an alternative with itself.
Analytic Hierarchy Process
Step 5: Calculate a Consistency Ratio
The consistency of the subjective input in the
pair-wise comparison matrix can be measured by
calculating a consistency ratio. A consistency ratio
of less than .1 is good. For ratios which are greater
than .1, the subjective input should be re-evaluated.
------- For each criterion, perform steps 2 through 5 -------
Analytic Hierarchy Process
Analytic Hierarchy Process
Step 6: Develop a Priority Matrix
After steps 2 through 5 has been performed for
all criteria, the results of step 4 are summarized in
a priority matrix by listing the decision alternatives
horizontally and the criteria vertically. The column
entries are the priority vectors for each criterion.
Step 7: Develop a Criteria Pair-wise Development
Matrix
This is done in the same manner as that used to
construct alternative pair-wise comparison matrices
by using subjective ratings (step 2). Similarly,
normalize the matrix (step 3) and develop a criteria
priority vector (step 4).
Step 8: Develop an Overall Priority Vector
Multiply the criteria priority vector (from step
7) by the priority matrix (from step 6).
Determining the Consistency
Ratio
Step 1:
Multiply each value in the first column of the
pairwise comparison matrix by the priority of the
first item; multiply each value in the second
column of the pairwise comparison matrix by the
priority of the second item; continue this process
for all columns of the pairwise comparison matrix.
Sum the values across the rows to obtain a vector
of values labeled weighted sum.
Determining the Consistency
Ratio
Step 2:
Divide the elements of the weighted sum
vector obtained in step 1 by the corresponding
priority for each criterion.
Step 3:
Computer the average of the values found in
step 2, max.
Determining the Consistency Ratio
Step 4:
Compute the consistency index, CI, of the n
alternatives by: CI = (max - n)/(n - 1).
Step 5:
Determine the random index, RI, as follows:
Number of
Alternative (n)
3
4
5
Random
Number of
Random
Index (RI) Alternative (n) Index (RI)
0.58
6
1.24
0.90
7
1.32
1.12
8
1.41
Example
Car selection
Characteristics
Accord
Saturn
Cavalier
Price
13100
11200
9500
Color
Black
red
blue
Miles per gallon
19
23
28
Interior
Deluxe
Above average
Standard
Body type
4-door midsize
2-door sport
2-door compact
Sound system
AM/FM, CD
AM/FM
AM/FM
Step 6:
Compute the consistency ratio: CR = CR/RI.
Example
Establishing priorities using AHP
Example
Establishing priorities using AHP
Pairwise
comparison
More
important
criterion
How much
more
important
Numerical
rating
Price-mpg
Price
Price-comfort
Price
Price-style
Price
Mpg-comfort
Comfort
Mpg-style
Style
Comfort-style
Style
