Multiple Criteria Decision Analysis

(MCDA)
Multiple goals
 Multiple alternatives to meet goals
 Multiple criteria for alternatives
 Multiple decision-makers with . . .
 Diverse preferences

How can we structure such a decision-making process?

2. Analytic Hierarchy Process (AHP)
The analytic hierarchy process (AHP), which provides a
proven, effective means to deal with complex decision
making, was first introduced by Thomas Saaty in 1970’s
Evaluation phase is divided
Objective
into four steps given below; Level 0: Goal

1. Generate pairwise matrices

2. Generate the weights of the
Criteria 1 Criteria 2 measures Criteria N Level 1: Criteria

3. Normalize weights to get

the consistency among Level 2: Alternatives

measures
Alternative 1 Alternative 2

4. Calculate the overall

ratings
Best Site Selection
The ABC Restaurant Corporation is offering franchise
opportunities. After completing all the requirements from the
applicants, the company seeks the best site location from a set of
alternative locations. There are three DMs to make the judgments:
CEO, CFO, and CIO.
Best Site
Level 0: Goal
Selection

Level 1: Criteria

Visibility Accessibility Traffic Convenience

Location1 Location1 Location1 Location1

Location2 Location2 Location2 Location2

Level 2: Alternatives

Location3 Location3 Location3 Location3

Procedure for Using AHP
 Model the problem as a hierarchy containing the decision goal, the
alternatives for reaching it, and the criteria for evaluating the
alternatives.
 Establish priorities among the elements of the hierarchy by making
a series of judgments based on pairwise comparisons of the
elements. For example, when comparing potential real-estate
purchases, the investors might say they prefer location over price
and price over timing.
 Synthesize these judgments to yield a set of overall priorities for
the hierarchy. This would combine the investors' judgments about
location, price and timing for properties A, B, C, and D into
overall priorities for each property.
 Check the consistency of the judgments.
 Come to a final decision based on the results of this process.

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 Example: Car Selection
 Objective
– Selecting a car
 Criteria
– Style, Reliability, Fuel-economy
 Alternatives
– Civic Coupe, Saturn Coupe, Ford Escort, Mazda
Miata
Hierarchy tree
S e le c t in g
a N ew C ar

S t y le R e lia b ilit y Fuel E conom y

Civic Saturn Escort Miata

Alternative courses of action
6
Construct comparison matrices
 Ranking of criteria
 Weights?
 AHP

Style Reliability Fuel Economy

Style 1/1 1/2 3/1

Reliability 2/1 1/1 4/1

Fuel Economy 1/3 1/4 1/1

Ranking of priorities
 Eigenvector [Ax = x]
Iterate
1. Calculate the eigenvector for the maximum
eigenvalue;
2. Normalize the eigenvector.
 Consistency Ratio
 The final step is to calculate the Consistency Ratio, CR by using the
table below, derived from Saaty’s book. The upper row is the order of
the random matrix, and the lower row is the corresponding index of
consistency for random judgments.

max  n
CI  ;
n 1
RI ;
CI
CR  .
RI
An inconsistency of 10% or less implies that the adjustment is small as compared to
the actual values of the eigenvector entries.
A CR as high as, say, 90% would mean that the pairwise judgments are just about
random and are completely untrustworthy! In this case, comparisons should be
repeated.
10
1
 max  n
CI  ;
n 1
Weights determined RI ;
CI
1 0.5 3 CR  .
RI
2 1 4
0.333 0.25 1.0

First column sums Normalized

0.4881 0.3195
0.8527 0.5584 Weights
0.1862 0.1220
1.5270 1.0

λmax=3.02

Consistency index , CI is found by

CI=(λmax-n)/(n-1)=(3.02-3)/(3-1)= 0.01

1
 Consistency Ratio
 The final step is to calculate the Consistency Ratio, CR by using the
table below, derived from Saaty’s book. The upper row is the order of
the random matrix, and the lower row is the corresponding index of
consistency for random judgments.

An inconsistency of 10% or less implies that the adjustment is small as compared to

the actual values of the eigenvector entries.
A CR as high as, say, 90% would mean that the pairwise judgments are just about
random and are completely untrustworthy! In this case, comparisons should be
repeated.  n
CI  max ;
n 1
In the above example: CR=CI/0.58=0.01/0.58=0.02 RI ;
0.02<0.1, so the evaluations are consistent!
CI
CR  .
RI
12
1
 Preference
 Style .3196
 Reliability .5584
 Fuel Economy .1220
S e le c t in g
a N ew C ar
1 .0

S t y le R e lia b ilit y Fuel E conom y

.3 1 9 6 .5 5 8 4 .1 2 2 0

1
 Ranking alternatives
Style Civic Saturn Escort Miata
Civic 1/1 1/4 2/1 1/6
Saturn 4/1 1/1 4/1 1/4
Escort 1/2 1/4 1/1 1/5
Miata 6/1 4/1 5/1 1/1
Eigenvector

.1160
.2470
.0600
.5770

1
 Ranking alternatives
Reliability Civic Saturn Escort Miata
Civic 1/1 2/1 5/1 1/1 .3790
.2900
Saturn 1/2 1/1 3/1 2/1
.0740
Escort 1/5 1/3 1/1 1/4
.2570
Miata 1/1 1/2 4/1 1/1

1
 Miles/gallon Normalized

Fuel Economy Civic 34 .3010

(quantitative Saturn 27 .2390
information)
Escort 24 .2120
Miata 28 .2480

113 1.0

1
 S e le c t in g
a N ew C ar
1 .0

S t y le R e lia b ilit y FuelE conom y

.3 1 9 6 .5 5 8 4 .1 2 2 0

- Civic .1160 - Civic .3790 - Civic .3010

- Saturn .2470 - Saturn .2900 - Saturn .2390
- Escort .0600 - Escort .0740 - Escort .2120
- Miata .5770 - Miata .2570 - Miata .2480

1
 Ranking of alternatives
Style Reliability Fuel
Economy
Civic .1160 .3790 .3010 .3196
*
Saturn .2470 .2900 .2390 .5584
Escort .0600 .0740 .2120
.1220
Miata .5770 .2570 .2480

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 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

1
 Cost
Normalized
Cost Cost
 MIATA $18K .333
 CIVIC $12K .222
 SATURN $15K .2778
 ESCORT $9K .1667

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 Yaahp Software
1. Draw the graph:

2
 2. Input the pairwise matrices:

In this example:
CR=CI/0.58=0.01/0.58=0.02 ,
0.02<0.1, so the evaluations are
consistent!

2
2
3. Adjust consistency:

2
2
4. Output the final results:

2
The Evaluation of System Risk of the Commercial Aircraft based on
Yaahp

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MCDA
1.AHP
2.TOPSIS
3.DEA

2
Comparison Matrix
Given: Three apples of different
sizes.

Apple A Apple B Apple C

We Assess Their Relative Sizes By Forming Ratios

Size
Comparison Apple A Apple B Apple C

Apple A S1/S1 S1/S2 S1/S3

Apple B S2 / S 1 S 2 / S2 S 2 / S3

Apple C S3 / S 1 S 3 / S2 S 3 / S3

2
Pairwise Comparisons
Size

Apple A Apple B Apple C

Size Apple A Apple B Apple C
Resulting Relative Size
Comparison
Priority of Apple
Eigenvector

Apple A 1 2 6

Apple B 1/2 1 3

Apple C 1/6 1/3 1

3
0.8847+0.4423+0.1474=1.47
44
W=[0.8847/1.4744, 0.4423/1.4744, 0.1474/1.4744]’
=[0.6, 0.3, 0.1]’

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Pairwise Comparisons
Size

Apple A Apple B Apple C

Size Apple A Apple B Apple C
Resulting Relative Size
Comparison
Priority of Apple
Eigenvector

Apple A 1 2 6 6/10 A

Apple B 1/2 1 3 3/10 B

Apple C 1/6 1/3 1 1/10 C

When the judgments are consistent, as they are here, any
normalized column gives the priorities.
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Example 1: Evaluate the following four types
of airplanes based on the six criteria.
Given the weight W  (0.2, 0.1, 0.1, 0.1, 0.2, 0.3)T

C Speed Scope Load Cost

Reliability Sensitivity
type (Mach) (Km) （ Kg ） million
a1 2.0 1500 20000 5.5 Good Excellent

a2 2.5 2700 18000 6.5 Not Good Good

1.8 2000 21000 4.5 Very Good Very Good

a3
2.2 1800 20000 5.0 Good Good
a4
3
一 . Normalization Approach

For X = （xij )
mn
xij
yij  m  1  i  m,1  j  n
x
i 1
ij
2

Matrix Y   yij  m  n
m

y
i 1
ij
2
1

0  yij  1

3
二 . Linear Scale Approach

For Positive Indicator

X   xij  m  n If xj  max xij  0
1 i  m
xij
yij  *  1  i  m,1  j  n 
xj
For Reverse Indicator

If xj   min xij  0
1 i  m
yij  x j


 1  i  m,1  j  n 
xij
Y   yij  m  n
0  yij  1
3
 三 . Range Approach

For Positive Indicator

xj   max xij , xj o  min xij
1i  m 1i  m

xj o  xij 1  i  m,1  j  n
yij  o  
xj  xj 

For Reverse Indicator

xj   min xij xj 0  max xij
1i  m 1i  m

xj 0  xij
yij  0  1  i  m,1  j  n 
xj  xj 

Y   yij  m  n 0  yij  1

3
Convert qualitative data to quantitative data

Very
Qualitative Index Very Bad Bad Good Excellent
Good

Positive Index 1 3 5 7 9

Reverse Index 9 7 5 3 1

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Approach 1 : Evaluate the following four types of
airplanes using the linear weighed method.
Given the weight W  (0.2, 0.1, 0.1, 0.1, 0.2, 0.3)T

C Speed Scope Load Cost

Reliability Sensitivity
type (Mach) (Km) （ Kg ） million
a1 2.0 1500 20000 5.5 Good Excellent

a2 2.5 2700 18000 6.5 Not Good Good

1.8 2000 21000 4.5 Very Good Very Good

a3
2.2 1800 20000 5.0 Good Good
a4
3
Convert qualitative data to quantitative data
Not Very
Qualitative Bad Good Excellent
good good

Quantitative 1 3 5 7 9

Cost
C Speed Scope Load Reliab Sensit
（ Million
type (Mach) (Km) （ Kg ） ility ivity
）
a1
2.0 1500 20000 5.5 5 9
a2 2.5 2700 18000 6.5 3 5

a3 1.8 2000 21000 4.5 7 7

a4 2.2 1800 20000 5.0 5 5

3
Linear Scale Approach
 0.80 0.56 0.95 0.82 0.71 1.00 
 
 1.00 1.00 0.86 0.69 0.43 0.56 
Y  ( yij ) 46 
 0.72 0.74 1.00 1.00 1.00 0.78 
 
 0.88 0.67 0.95 0.90 0.71 0.56 

u1  0.835，u2  0.709，u3  0.853，u4  0.738

u ( a* )  max ui  u3  u (a3 )
1 i  4

a*  a3

a3  a1  a4  a2

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四 . TOPSIS(Technique for Order Preference by
Similarity to Ideal Solution)
 v11 v12  v1n 
v v  v 
V  (vij ) mn   21 22 2n 

    
 
vm1 vm 2  vmn 
Determine the ideal solution and the negative-ideal
solution.
S   {V1 ,V2 ,Vn }  {(max j vij | i  I ' ), (min j vij ) | i  I "}
S   {V1 , V2 ,Vn }  {(min j vij | i  I ' ), (max j vij ) | i  I "}
I’ is associated with benefit criteria, and I’’ is associated
with cost criteria.
4
The relative closeness to the ideal solution:

n
d ( si , S  )  d i   (v
j 1
ij  V  2
j ) , (i  1, 2,  , m)

n
d ( si , S  )  di   ij j ) , (i  1, 2,, m)
( v
j 1
 V  2

di
Ci   
, (i  1, 2, , m)
di  di

4
Example: Evaluate the following four types of
airplanes using TOPSIS approach.
Given the weight W  (0.2, 0.1, 0.1, 0.1, 0.2, 0.3)T

Cost
C Speed Scope Load Reliab Sensit
（ Million
type (Mach) (Km) （ Kg ） ility ivity
）
a1
2.0 1500 20000 5.5 5 9
a2 2.5 2700 18000 6.5 3 5

a3 1.8 2000 21000 4.5 7 7

2.2 1800 20000 5.0 5 5

a4
4
 Using TOPSIS method to make decision:
Normalize X  ( xij ) 46
Assume W  (0.2, 0.1, 0.1, 0.1, 0.2, 0.3)T
 0.4671 0.3662 0.5056 0.5063 0.4811 0.6708 
 
 0.5839 0.6591 0.4550 0.5983 0.2887 0.3127 
Y  ( yij ) 46 
 0.4204 0.4882 0.5308 0.4143 0.6736 0.5217 
 
 0.5139 0.4392 0.5056 0.4603 0.4811 0.3727 
 0.0934 0.0366 0.0506 0.0506 0.0962 0.2012 
 
0.1168 0.0659 0.0455 0.0598 0.0577 0.1118 
V  (vij ) 46 
 0.0841 0.0488 0.0531 0.0414 0.1347 0.1565 
 
 0.1028 0.0439 0.0506 0.0460 0.0962 0.1118 
={0.1168 ， 0.0659 ， 0.0531 ， 0.0414 ， 0.1347 ， 0.20
S*

12},
S ={0.0841 ， 0.0366 ， 0.0455 ， 0.0598 ， 0.0577 ， 0.1118} 。
4
Distances:
=0.0545 ， =0.1197 ， =0.0580 ， =0.1009 ，
=0.0983 ， =0.0439 ， =0.0920 ， =0.0458 。

The =0.643
relative
，
closeness to the
=0.268 ，
ideal solution:
=0.613 ， =0.312 ，
Using
d1* TOPSIS method
d 2* to make
d3* decision d 4*
d1 d 2 d 3 d 4
a1  a3  a4  a2
* *
C1Linear C
Scale
2 Approach C4*
a3  a1  a4  a2
a1  a3  a4  a2

4
 Economy Versus the Environment
Table 1 1985-2002 normalized data

年份 1985 1986 1987 1988 1989 1990 1991 1992 1993

water 0.1376 0.2361 0.3508 0.4442 0.3456 0.4333 0.4053 0.2497 0.1107
gas 0.0000 0.0108 0.0224 0.0348 0.0342 0.0335 0.0588 0.0448 0.0393
solid 0.0000 0.0156 0.0499 0.0797 0.0734 0.0680 0.0466 0.0974 0.0801
pgdp 0.0000 0.0027 0.0079 0.0162 0.0190 0.0204 0.0251 0.0396 0.0631
年份 1994 1995 1996 1997 1998 1999 2000 2001 2002
water 0.1101 0.2006 0.1951 0.1993 0.0194 0.0000 0.0084 0.7342 0.6502
gas 0.0603 0.1379 0.1223 0.1487 0.1237 0.1557 0.1824 0.3400 0.3748
solid 0.1350 0.1565 0.1576 0.1530 0.1649 0.1583 0.1777 0.2480 0.2811
pgdp 0.0917 0.1210 0.1432 0.1606 0.1737 0.1862 0.2068 0.2284 0.2571

Table 1 2003-2010 normalized data

年份 2003 2004 2005 2006 2007 2008 2009 2010

water 0.4874 0.6555 1.0000 0.9044 0.7111 0.6113 0.6964 0.6586

gas 0.3876 0.5053 0.5931 0.7661 0.7796 0.8343 0.8603 1.0000

solid 0.2945 0.4007 0.5488 0.7450 0.7667 0.8335 0.8586 1.0000

pgdp 0.3030 0.3665 0.4550 0.5305 0.6331 0.7523 0.8342 1.0000

4
Introduction to Rough Set

47 4
a: salary; b: work condition; k: profit; l= Investment ; m: satisfaction

4
Conflict Analysis based on Rough Set in E-commerce

4
Conflict Analysis based on Rough Set in E-commerce

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5