Analytic Hierarchy Process

Multiple-criteria decision-making
Real world decision problems
multiple, diverse criteria
qualitative as well as quantitative information

Comparing apples and oranges?

Spend on defence or agriculture?
Open the refrigerator - apple or orange?

AHP
Information is decomposed into a hierarchy of
alternatives and criteria
Information is then synthesized to determine
relative ranking of alternatives
Both qualitative and quantitative information
can be compared using informed judgements
to derive weights and priorities

Example: RECYCLING PROCESS SELECTION

Objective
Selecting a RECYCLING PROCESS

Criteria
Energy use(c1), solid waste(c2), global
warming(c3) Cost?

Alternatives(Recycling)
Mechanical(A1), Feedstock(A2), Thermal(A3),
Landfill(A4)

Hierarchical tree
Selecting
S e l ePlastic
c t in g
Recycling best Process

a N ew C ar

S tused
y le
Energy
-Mechanical
-Feed Stock
-Thermal
-Land fill

R e lWaste
ia b ilit y
Solid
-Mechanical
-Feed Stock
-Thermal
-Land fill

FGlobal
u e l E Warming
conom y
-Mechanical
-Feed Stock
-Thermal
-Land fill

Ranking of criteria
Weights?
AHP
pair-wise relative importance
[1:Equal, 3:Moderate, 5:Strong, 7:Very strong, 9:Extreme]

Energy usedSolid Waste Global Warming

Energy used

1/1

1/2

3/1

Solid Waste

2/1

1/1

4/1

Global Warming

1/3

1/4

1/1

Ranking of priorities
Eigenvector

[Ax = x]

Iterate
1. Take successive squared powers of matrix
2. Normalize the row sums
Until difference between successive row sums is
less than a pre-specified value

1
0.5
2
1
0.333 0.25
Row sums
12.75
22.3332
4.8333
39.9165

3
4
1.0

squared

3.0
1.75 8.0
5.3332 3.0
14.0
1.1666 0.6667 3.0

Normalized
Row sums
0.3194
0.5595
0.1211
1.0

0.3196
New iteration gives normalized row sum 0.5584
0.1220
Difference is:

0.3194
0.5595 0.1211

0.3196
0.5584
0.1220

- 0.0002
= 0.0011
- 0.0009

Preference
Energy used
.3196
Solid Waste
.5584
Global Warming .1220
S e l e c t i nBest
g
Selecting
a N ew C ar
recycling
1 .0
1.0
S t y used
le
Energy
.3 1 9 6
.3196

R e lWaste
ia b ilit y
Solid
.5 5 8 4

Global
F u e l EWarming
conom y

.1 2 2 0

Ranking alternatives
c1
(A1)

(A1)
1/1

(A2)
(A3)
(A4)

(A2)
1/4

(A3)
4/1

(A4)
1/6

4/1
1/4
6/1

1/1
1/4
4/1

4/1
1/1
5/1

1/4
1/5
1/1

c2
(A1)

(A1)
1/1

(A2)
2/1

(A3)
5/1

(A4)
1/1

(A2)
(A3)
(A4)

1/2
1/5
1/1

1/1
1/3
1/2

3/1
1/1
4/1

2/1
1/4
1/1

Eigenvector
.1160
.2470
.0600
.5770

.3790
.2900
.0740
.2570

$/ton of waste

Cost
(quantitative
information)

Normalized

(A1)

34

.3010

(A2)
(A3)
(A4)

27
24
28

.2390
.2120
.2480

113

1.0

S e l e c t i nBest
g
Selecting
a N ew C ar
recycling
1 .0
1.0
S t y used
le
Energy
.3 1 9 6
.3196

- (A1)
- (A2)
- (A3)
- (A4)

.1160
.2470
.0600
.5770

R e lWaste
ia b ilit y
Solid
.5 5 8 4

- (A1)
- (A2)
-(A3)
- (A4)

.3790
.2900
.0740
.2570

Global
F u e l EWarming
conom y

.1 2 2 0

- (A1) .3010
- (A2) .2390
- (A3) .2120
- (A4) .2480

Ranking of alternatives
c1
A1
A2
A3
A4

.1160

c2

c3
.3196

.3790 .3010

.2470
.0600

.2900 .2390
.0740 .2120

.5770

.2570

.2480

.5584
.1220

.3060
.2720
.0940
.3280

Handling Costs
Dangers of including Cost as another criterion
political, emotional responses?

Separate Benefits and Costs hierarchical trees

Costs vs. Benefits evaluation
Alternative with best benefits/costs ratio

Cost vs. Benefits

A1
A2
A3
A4

Cost

Normalized
Cost

Cost/Benefits
Ratio

$18K
$12K
$15K
$9K

.333
.222
.2778
.1667

.9840
1.3771
.9791
.5639