Normalization Techniques For Multi-Criteria Decision Making: Analytical Hierarchy Process Case Study
Normalization Techniques For Multi-Criteria Decision Making: Analytical Hierarchy Process Case Study
Normalization Techniques For Multi-Criteria Decision Making: Analytical Hierarchy Process Case Study
1
Computational Intelligence Group of CTS/UNINOVA and Faculty of Sciences and
Technology, Nova University of Lisbon
2829-516 Caparica, Portugal
[email protected], [email protected], [email protected]
1 Introduction
Everybody makes decisions in their daily lives, as for example: “Should I take an
umbrella today”? “Where should I go for lunch”? To make decisions we need access
to information (or data) and to reach a decision we need to combine the data to obtain
a final score for each candidate decision alternative (e.g. combining food prices and
service of restaurants to recommend). The aim of Multi-Criteria Decision Making
(MCDM) methods is to rate and prioritize a set of alternatives that best satisfy a given
set of criteria [1]. Criteria are a set of requirements or independent attributes that have
to be satisfied by several alternatives. Each criterion may be measured in different
units, for example, degrees, kilograms or meters; but they all have to be normalized to
obtain dimensionless classifications, i.e. a common numeric range/scale, to allow
aggregation into a final score. Hence, data normalization is an essential part of any
decision making process because it transforms the input data into numerical and
comparable data, allowing using MCDM methods to rate and rank alternatives [2, 3].
In this work, the main research question that we address is: Which normalization
technique is more suitable for usage with the AHP method?
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The motivation for carrying out this work includes four interconnected issues: a)
the importance of data normalization for decision problems where we need to fuse or
aggregate data to obtain a final score per alternative; b) the reduced number of
research studies available in this topic; c) continuation of previous work on suitability
of normalization techniques for well-known MCDM methods (e.g. TOPSIS) [4]; d)
contributing to advances in Cyber Physical Systems [5] research, where huge amounts
of available data from heterogeneous sensors need to be fused (aggregated) to
determine a combined view. Specifically, in this study we focus on the well-known
AHP method because it is a well-known and widely used MCDM method [6–13] but
we plan to perform the same study for data fusion problems as well as other MCDM
methods in the future, to determine which technique is more suitable for any decision
problem that requires combining (fusing) data.
The Analytic Hierarchy Process (AHP) was introduced by Saaty [6, 7] to solve
unstructured problems in economics, social sciences, and management [8]. AHP has
been used in a vast range of problems from simple ones (e.g. selecting a school) to
harder ones (e.g. in allocating budgets and energy domains) [8]. When applying the
AHP method, the decision maker is able to structure the decision problem and break it
down into a hierarchical top-down process. Then, he/she performs a pairwise matrix
comparison of criteria using a [1–9] scale (corresponding to semantic interpretations
such has “A is much more important than B” regarding a criterion). After
normalization, the priorities are determined using either Eigen vectors or a simplified
version with weighted sum (SAW) [9, 10].
AHP involves five main steps [13]: Step 1: Decompose the problem into a
hierarchical structure; Step 2: Employ pairwise comparisons. A pairwise comparison
is the process of comparing the relative importance, preference, or likelihood of two
elements (objectives) with respect to another element (the goal). Pairwise
comparisons are carried out to establish priorities. Decision elements at each
hierarchy level are compared pairwisely and then the reciprocal matrix is completed;
Step 3: Determine the logical consistency and if > 10% revise the pairwise
classifications until the consistency index is below 10%. In the implementation of
AHP, we may face with inconsistent judgment of input data that it may cause some
bad effects on decision process. For example, A1 may be preferred to A2 and A2 to
A3, but A3 may be preferred to A1. So, Saaty [7] defined a measure of deviation from
consistency that is called called a consistency index, as: C.I. = (λmax - N)/ (N-1),
where N is the dimension of the matrix and λ is the largest eigenvalue of the matrix
A. Then, Saaty calculated a consistency ratio (C.R.) as the ratio of the C.I. to a
random index (R.I.) which is the average C.I. of sets of judgments (from a 1 to 9
scale) for randomly generated reciprocal matrices [7]. Step 4: Estimate the relative
weights by combining the individual subjective judgments. We can use the eigenvalue
method to estimate the relative weights of the decision elements. In order to estimate
the relative weight of the decision elements in a matrix, we can use A.Ⱳ=λmax .Ⱳ
where W is the weight of criterion [13]. Step 5: Determine the priority of alternatives
by doing aggregation on relative weights which is obtained by combining the criterion
priorities and priorities of each decision alternatives relative to each criterion. Since in
our work we discuss the suitability of normalization techniques for the AHP method,
we focus on step 4 and 5.
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3 Normalization
There are several definitions for data normalization, depending on the study domain.
For example, in Databases, data normalization is viewed as a process where data
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attributes, within a data model, are organized in tables to increase the cohesion and
efficiency of managing data. In statistics and its applications, the most common
definition is the process of adjusting values measured on different scales to a common
scale, often prior to aggregating or averaging them [19]. Many other definitions exist,
depending on the context or study domain (see for example [20]). Here we focus on
normalization techniques for MCDM. In general, normalization in MCDM is a
transformation process to obtain numerical and comparable input data by using a
common scale [4]. After collecting input data, we must do some pre-processing to
ensure comparability of criteria, thus making it useful for decision modeling.
Furthermore, in MCDM, normalization techniques usually map attributes (criteria)
with different measurement units to a common scale in the interval [0-1] [21, 22].
Several studies on the effects of normalization techniques on the ranking of
alternatives in MCDM problems have shown that certain techniques are more suitable
for specific decision methods than others [14], [23–28].
Chakraborty and Yeh [23] analyzed four normalization techniques (vector, linear
max-min, linear max and linear sum) in the MCDM simple additive weight (SAW)
method. They used a ranking consistency index (RCI) and calculated the average
deviation for each normalization technique and concluded that the best normalization
technique for SAW is the vector normalization. Further, the same authors analyzed
the effects of those normalizations for order preference by similarity to ideal solution
method (TOPSIS) by calculating ranking consistency and weight sensitivity of each
normalization and proved that vector normalization technique is the best for
implementing in TOPSIS method [24]. The authors [24] defined weight sensitivity as
a method to analyze sensitivity level of different normalization procedures under
different problem settings. They assumed same weights for attributes and then they
increased their weights to find the sensitivity of the alternatives (normalization
techniques) [24].
Also, the result was further validated by Vafaei et al. [4], who used Pearson and
Spearman correlation coefficients to also conclude that the best normalization
technique for TOPSIS method is the vector normalization.
In this work, we selected five (shown in Table 1) of the most promising
normalization techniques [2, 14] and analyzed their effect on the AHP method. In
Table 1, each normalization method is divided in two formulas, one for benefit and
another for cost criteria, to ensure that the final decision objective (rating) is logically
correct, i.e. when it is a benefit criterion for high values it will correspond to high
normalized values (maximization - benefit) and when it is a cost criterion high values
will correspond to low normalized values (minimization - cost).
Summarizing, the aim of this study is to identify which normalization technique is
best suited for the AHP method.
Normalization Techniques for Multi-Criteria Decision Making 267
ln(𝑟𝑖𝑗 )
Benefit criteria 𝑛𝑖𝑗 =
ln(∏𝑚 𝑖=1 𝑟𝑖𝑗 )
Logarithmic normalization
ln(𝑟𝑖𝑗 )
(N5) [2] 1 − ∏𝑚
Cost criteria ln( 𝑖=1 𝑟𝑖𝑗 )
𝑛𝑖𝑗 =
𝑚−1
Here, we discuss the suitability of five normalization techniques for AHP with an
illustrative example for smart car parking. This illustrative case consists of 3 criteria
(C1, C2, C3), which correspond to time to park, distance, and size of the parking
space, and 7 alternatives (A1, A2, …, A7), which correspond to candidate location
sites for parking. Finding the best place for parking the car is the goal; C1 and C2 are
cost criteria, where low values are better, and C3 is a benefit criterion, where high
values are desirable. Following the AHP method we defined three pairwise
comparison matrices for each criterion (example in Table 2) and then one pairwise
comparison matrix between criteria. To these four matrices we applied the five
normalization techniques, separately, to determine the ranking of alternatives and
compare results. The pairwise decision matrix for criteria “time to park”, after steps 1,
2, 3 of AHP, is shown in Table 2.
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A1 A2 A3 A4 A5 A6 A7
A1 1 1/3 1/2 3 1/3 2 1
A2 3 1 1 4 1 3 1
A3 2 1 1 2 1/2 3 2
A4 1/3 1/4 1/2 1 1/4 1 1/3
A5 3 1 2 4 1 3 1
A6 1/2 1/3 1/3 1 1/3 1 3
A7 1 1 1/2 3 1 1/3 1
We started by testing the sum-based normalization (N3 in Table 1), the usual
normalization technique for AHP [7], because it ensures column sum per alternative is
equal to one that is defined by Saaty [7]. The other normalization techniques do not
include this characteristic and the sum of the normalized values can be bigger than 1;
hence, for comparison purposes we opted for re-normalizing the other four using N3.
For illustrating the alternatives rating procedure we show the calculation for vector
normalization of alternative A1 and the final results for all alternatives are shown in
the Table 3 and 4:
𝑃 𝑥11 1
11= = =0.7974
√∑7
𝑗=1 𝑥1𝑗 12 12
√(12 )+(32 )+(22 )+( )+(32 )+( )+(1)2
3 2
𝐴𝑣𝑒𝑟𝑎𝑔𝑒𝑃1 0.7974
𝐴11 = = = 0.1659
𝑆𝑢𝑚 4.8050
Table 3: Normalization results for vector normalization technique for cost criteria.
P1 P2 P3 P4 P5 P6 P7 Average
P1 0.7974 0.8390 0.8091 0.5991 0.8227 0.6524 0.7583 0.7540
P2 0.3922 0.5169 0.6182 0.4655 0.4681 0.4786 0.7583 0.5283
P3 0.5948 0.5169 0.6182 0.7327 0.7341 0.4786 0.5165 0.5988
P4 0.9325 0.8792 0.8091 0.8664 0.8670 0.8262 0.9194 0.8714
P5 0.3922 0.5169 0.2365 0.4655 0.4681 0.4786 0.7583 0.4737
P6 0.8987 0.8390 0.8727 0.8664 0.8227 0.8262 0.2748 0.7715
Normalization Techniques for Multi-Criteria Decision Making 269
Table 4: Re-normalization results for vector normalization technique for cost criteria.
A1 A2 A3 A4 A5 A6 A7 Average
A1 0.1659 0.1814 0.1695 0.1304 0.1769 0.1393 0.1598 0.1605
A2 0.0816 0.1118 0.1295 0.1013 0.1007 0.1022 0.1598 0.1124
A3 0.1238 0.1118 0.1295 0.1595 0.1578 0.1022 0.1089 0.1276
A4 0.1941 0.1901 0.1695 0.1886 0.1864 0.1764 0.1938 0.1856
A5 0.0816 0.1118 0.0495 0.1013 0.1007 0.1022 0.1598 0.1010
A6 0.1870 0.1814 0.1828 0.1886 0.1769 0.1764 0.0579 0.1644
A7 0.1659 0.1118 0.1695 0.1304 0.1007 0.2012 0.1598 0.1485
sum 1 1 1 1 1 1 1 1
The global weights of alternatives and ranking results for the four tested
normalization techniques are shown in Table 5. We discarded the logarithmic
normalization technique from our results because we obtained negative and infinite
data (due to the characteristics of pairwise matrices), hence it is not usable
(appropriate) for the AHP method. As it can be seen in Table 5, there is consensus on
which normalization techniques is better for alternatives A2, A3, A4 and A5 (i.e. they
all have the same ranking), but for the other alternatives there was no consensus.
Since, it is not possible to distinguish which is the best normalization technique just
by looking at the results, we used the evaluation approach proposed in [4] to make the
assessment. Hence, we calculated Pearson correlation and mean r s values [4] with the
global weights of alternatives and Spearman correlation with the ranks of alternatives
to assess the suitability of the four tested normalization techniques for the AHP
method. Table 6 displays that there exists complete consensus between Pearson and
Spearman correlation’s results and it is clear that the best normalization technique is
N1 (linear: max) because it has the highest mean rs value (P=0.9606 & S=0.9524) and
the worst one is N3 (linear sum) with the lowest mean rs value (P=0.9029 &
S=0.8413).
Table 5: Global weight (G) and Ranking (R) of alternatives for the smart parking example.
N1 N2 N3 N4
G R G R G R G R
A1 0.1972 2 0.1925 2 0.1505 4 0.1693 2
A2 0.0681 6 0.0634 6 0.0762 6 0.1165 6
A3 0.1143 5 0.1161 5 0.0993 5 0.1297 5
A4 0.2469 1 0.2658 1 0.2876 1 0.1755 1
A5 0.0460 7 0.0291 7 0.0749 7 0.1101 7
A6 0.1765 3 0.1869 3 0.1598 2 0.1450 4
A7 0.1509 4 0.1462 4 0.1517 3 0.1538 3
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Table 6: Pearson correlation between global weights & Spearman correlation between ranks
of alternatives for each normalization technique.
N1 N2 N3 N4 Mean rs Rank
P S P S P S p S P S P S
* P = Pearson
**S = Spearman
From the example we can conclude that linear max (N1) is the best normalization
technique for the AHP method and linear sum (N3) is the worst one. It is interesting
to note that the single normalization used in AHP (linear sum- N3) is the worst one
from this comparison study. Although N1 is elected as the most suitable
normalization technique it required a re-normalization with N3 because the sum of the
normalized values has to be 1. Therefore, we may conclude that a combination of
max-normalization (N1) with linear-sum (N3) seems the most appropriate for AHP.
5 Conclusion
Normalization is the first step of any decision making process to transform data in
different units into a common scale and comparable units. In this study we tested five
common normalization techniques to assess their suitability for the AHP MCDM
method. The tests showed that the logarithmic normalization technique (N5) is not
usable in the AHP method because it can result in zero or infinite values in the
normalized data, which is not acceptable to use in the method. Further, since AHP
requires the columns of the pairwise matrices to sum up 1, the techniques: linear max,
linear max-min and vector normalization techniques had to be re-normalized with
linear sum (N3) before being compared. To assess the suitability of the normalization
techniques for AHP we used Pearson and Spearman correlation and mean rs values;
the results showed that the best normalization technique is N1 (linear: max) combined
with N3 (linear-sum) to ensure the sum is 1, while the worst one is N3 alone.
In a previous work we did the same assessment study for TOPSIS and in the future
we plan to extend it to other well-known MCDM methods, with the aim to support
decision makers by recommending the most suitable normalization techniques for
usage with each MCDM method.
Normalization Techniques for Multi-Criteria Decision Making 271
References