Analytic Hierarchy Process

Strategic Decision Making and Negotiation

Syndicate 5
Alya Lihan Eltofani 29120216
Bhavya Sree Chollety 29120901
Hening Puji Pangastuti 29120287
I G K Fitriadhi Rukman 29120290
Imam Teguh Islamy 29120269
Cases
A motorist is using the AHP to choose a new car from three possible models: an Arrow, a
bestmobile and a commuter. The choice will be based on just two attributes: cost and
style. The motorist considers that cost is weakly more important than style.
When asked to compare the costs of the cars, the motorist makes the followig statements:
on cost, the bestmobile is weakly preferred to the arrow, but the arrow is weakly preferred
to the commuter. Also the bestmobile is extremely preferred to the commuter.
On style, the arrow is very strongly preferred to the bestmobile, but the commuter is
weakly preferred to the arrow. Also the commuter is extremely preferred to the
bestmobile.
Cases (cont’)
1. Construct a hierarchy to represent the decision problem
2. Calculate the weight for each table in hierarchy and hence determine which car
should be purchased
3. Calculate the inconsistency ratios for the motorist comparisons of the cars on (i) cost
and (ii) style and interpret your results
Step 1: Hierarchy Structure

Select the Best Transportation

Overall Goals
Model

Criteria Cost Style

Arrow Arrow
Decision
Best Mobile Best Mobile
Alternatives
Commuter Commuter
Step 2: Pairwise Comparison Matrix

Cost Arrow Best Mobile Commuter Style Arrow Best Mobile Commuter

Arrow 1,000 0,333 3,000 Arrow 1,000 7,000 0,333

Best Mobile 3,000 1,000 9,000 Best Mobile 0,143 1,000 0,111

Commuter 0,333 0,111 1,000 Commuter 3,000 9,000 1,000

Criteria Cost Style

Cost 1,000 3,000

Style 0,333 1,000

Step 3: Synthesizing Procedure
Cost Criteria
Step 3: Synthesizing Procedure
Cost Criteria

Step 1: Sum the Values in Each Column

Cost Arrow Best Mobile Commuter

Arrow 1,000 0,333 3,000

Best Mobile 3,000 1,000 9,000

Commuter 0,333 0,111 1,000

Col Total 4,333 1,444 13,000

Step 3: Synthesizing Procedure
Cost Criteria

Step 2: Divide the Values with Total Column

Cost Arrow Best Mobile Commuter Row Average

Arrow 0,231 0,231 0,231 0,231

Best Mobile 0,692 0,692 0,692 0,692

Commuter 0,077 0,077 0,077 0,077

Col Total 1,000 1,000 1,000 1,000

Step 3: Synthesizing Procedure
Cost Criteria

Step 3: Find Weight Sum with Multiple each Values with Row Average and Sum

1,000 0,333 3,000 0,692

0,231 X 3,000 + 0,692 X 1,000 + 0,077 X 9,000 = 2,077
0,003 0,111 1,000 0,231
Step 3: Synthesizing Procedure
Cost Criteria

Step 4: Divided Weight Sum with Priority Factor

0,692 0,231 2,996

2,077 : 0,692 = 2,900
0,231 0,077 3,000
Step 3: Synthesizing Procedure
Cost Criteria

Step 5: Find Consistency Index (CI) and Consistency Ratio (CR)

𝛌Max = Average of Step 4 = 2,965 | N=3 | Random Index (RI) = 0,58

CI = ( 𝛌Max - n ) / ( n - 1 ) CR = CI / RI CR < 0,10

CI = ( 2,965 - 3 ) / ( 3 - CR = -0,017 / 0,58 Result is consistent

1) CR = -0,029
CI = -0,017
Step 3: Synthesizing Procedure
Style Criteria
Step 3: Synthesizing Procedure
Style Criteria

Step 1: Sum the Values in Each Column

Style Arrow Best Mobile Commuter

Arrow 1,000 7,000 0,333

Best Mobile 0,143 1,000 0,111

Commuter 3,000 9,000 1,000

Col Total 4,143 17,000 1,444

Step 3: Synthesizing Procedure
Style Criteria

Step 2: Divide the Values with Total Column

Style Arrow Best Mobile Commuter Row Average

Arrow 0,241 0,412 0,231 0,295

Best Mobile 0,034 0,059 0,077 0,057

Commuter 0,724 0,529 0,692 0,649

Col Total 1,000 1,000 1,000 1,000

Step 3: Synthesizing Procedure
Cost Criteria

Step 3: Find Weight Sum with Multiple each Values with Row Average and Sum

1,000 7,000 0,333 0,902

0,295 X 0,143 + 0,057 X 1,000 + 0,649 X 0,111 = 0,169
3,000 9,000 1,000 2,031
Step 3: Synthesizing Procedure
Cost Criteria

Step 4: Divided Weight Sum with Priority Factor

0,902 0,295 3,109

0,169 : 0,057 = 2,975
2,031 0,649 3,124
Step 3: Synthesizing Procedure
Style Criteria

Step 5: Find Consistency Index (CI) and Consistency Ratio (CR)

𝛌Max = Average of Step 4 = 3,069 | N=3 | Random Index (RI) = 0,58

CI = ( 𝛌Max - n ) / ( n - 1 ) CR = CI / RI CR > 0,10

CI = ( 3,069 - 3 ) / ( 3 - CR = 0,034 / 0,58 Result is consistent

1) CR = 0,060
CI = 0,034
Step 4: Ranking of Criteria

Step 1: Sum the Values in Each Column Step 2: Divide the Values with Total Column

Criterion Cost Style Criterion Cost Style Row Average

Cost 1,000 3,000 Cost 0,750 0,750 0,750

Style 0,333 1,000 Style 0,250 0,250 0,250

Col Total 1,333 4,000 Col Total 1,000 1,000 1,000

Step 5: Ranking of Alternative

Arrow (0,231 x 0,750) + (0,295 x 0,245

Best Mobile = 0,250) = 0,534
Commuter (0,692 x 0,750) + (0,057 x 0,220
0,250)
(0,077 x 0,750) + (0,649 x
0,250)
The Alternative Rank :

1. Best Mobile (0,534)

2. Arrow (0,245)
3. Commuter (0,220)
Conclusion

Cost
Arrow 0.173 As for the best score for cost is held by the
Best Mobile 0.519
best mobile car (0.519)
Commuter 0.057

Arrow
Style
0.072
As for the best score for style is held by the
Best Mobile 0.015 Commuter car (0.162)
Commuter 0.162
Conclusion
Criterion
Cost 0.75 As for the criterion, cost (0.75) is really
Syle 0.25
determine our decision rather than style (0.25)
.

Ranking of
Alternative

After we multiply every alternative with every criterion,

Arrow 0.245
Best Mobile 0.534 we come up with Best Mobile is the best choice to buy
Commuter 0.220