Multi Criteria Decision Making:

TOPSIS & AHP

Dr. Surya Prakash Singh

PhD (IIT Kanpur), PDF (NUS Singapore, MIT USA)
Department of Management Studies
Indian Institute of Technology Delhi
E-mail: surya.singh@gmail.com
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 The problem
There are m alternatives and n attributes
(criteria) on the basis of which the m
alternatives are to be ranked.
The criteria may be tangible or intangible
The importance of the criteria to the
decision maker is represented by weights
assigned to each of the criteria

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Analytic Hierarchy Process (AHP)

Based on a hierarchical structure of the

goal, objectives and alternatives
(The Goal at the highest level, alternatives at the lowest
level and objectives or criteria in between)
The weights of the criteria or objectives
need not be known a priori but are
determined by pair-wise comparisons

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Hierarchical Structure

Goal

Criteria

Alternatives

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Scale for pair-wise comparison
1 Equally preferred
2 Equally to Moderately preferred
3 Moderately preferred
4 Moderately to Strongly preferred
5 Strongly preferred
6 Strongly to Very Strongly preferred
7 Very Strongly preferred
8 Very to Extremely Strongly preferred
9 Extremely preferred
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 Steps
Develop hierarchy
Perform pair-wise comparison of attributes
and determine priority vector (B2)
For each attribute perform pair-wise
comparison of the alternatives and
determine priority vector Vi for i =1,…,n
Matrix B3= V1, V2 ,…,Vn
Synthesize to determine scores vector
B3*B2T
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Normalization and averaging
Divide the elements of each column by
sum of that column
Add the elements in each resulting row
and divide this sum by the number of
elements in the row

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 An example
Anil is about to graduate from college and is
trying to determine which job to join. He has
three options to choose from. He considers
four criteria (objectives) to meet the goal :
– High starting salary
– Quality of life in the city where job is located
– Interest in the type of work
– Nearness of job to family

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 Problem hierarchy

Satisfaction with a Job

Nearness to
Starting Salary Life Quality in City Interest in Job
Family

Job A Job B Job C

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 Pair-wise comparison at criteria level
Salary Quality Interest Nearness Priority
Vector (B2)
Salary 1 5 2 4 0.51

Quality 1/5 1 1/2 1/2 0.099

Interest 1/2 2 1 2 0.24

Nearness 1/4 2 1/2 1 0.148

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Pair-wise comparison at alternative level

Salary Job A Job B Job C Priority

Vector V1

Job A 1 2 4 0.571

Job B 1/2 1 2 0.296

Job C 1/4 1/2 1 0.143

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Pair-wise comparison at alternative level

Quality Job A Job B Job C Priority

Vector (V2)

Job A 1 1/3 1/2 0.163

Job B 3 1 2 0.540

Job C 2 1/2 1 0.297

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Pair-wise comparison at alternative level

Interest Job A Job B Job C Priority

Vector (V3)

Job A 1 1/3 1/3 0.168

Job B 2 1 2 0.484

Job C 3 1/2 1 0.349

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Pair-wise comparison at alternative level

Nearness Job A Job B Job C Priority

Vector (V4)

Job A 1 1/4 1 0.167

Job B 4 1 4 0.667

Job C 1 1/4 1 0.167

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 Finding final scores for the alternatives

V1 V2 V3 V4 B2

0.571 0.163 0.168 0.167 0.51 0.372

Job A

0.099
0.296 0.540 0.484 0.667 = 0.419
0.24
Job B
0.143 0.297 0.349 0.167 0.148 0.210

Job C

Rank in descending order of scores

Job B, Job A, Job C
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Thank You!

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