AHP New

ANALYTIC HIERARCHY
PROCESS (AHP)
The Analytical Hierarchy Process (AHP)

Developed by Thomas Saathy
A method to select the best one
To answer the question which one?
To buy a house from several houses
To select a university from a group
of universities
To choose the most qualified
candidate, etc.
Preference Scale for Piecewise

Comparison
Let illustrate AHP by using an example.

1. PETRONAS SITE SELECTION
PROBLEM
Suppose that PETRONAS has identified three
potential sites for its latest project near Alor
Setar (A), Bukit Merah (B) and Cyberjaya (C).
The company has identified four primary
criteria on which it will compare the sites
namely:
The four criteria:

The customer market (overall market size,
and population at different age level)
Income level
Infrastructure (including utilities, and roads)
Transportation (proximity to highway for
supplier deliveries and customer access)
The overall objective of the company is

to select the best site
1. Comparison matrix for customer market:

CUSTOMER MARKET
A
1/3
1/5
1/2
2. Comparison matrix for income level:

INCOME LEVEL
A
1/3
1/6
1/9
3. Comparison matrix for infrastructure:

INFRASTRUCTURE
A
1/3
1/7
4. Comparison matrix for transportation:

TRANSPORTATION
A
1/3
1/2
1/4
Let us do synthesization: decision alternatives

are prioritized within each criterion.
STEP 1
CUSTOMER MARKET
A
1/3
1/5
1/2
Total
11/6
16/5
Next, we divide each value in a column by its

corresponding column sum. This results in a
normalized matrix as follows:
STEP 2
CUSTOMER MARKET
A
6/11
3/9
5/8
2/11
1/9
1/16
3/11
5/9
5/16
Next, change them to decimal and find the

average for each row.
STEP 3
CUSTOMER MARKET
Row
average
0.5455
0.3333
0.6250
0.5012
0.1818
0.1111
0.0625
0.1185
0.2727
0.5556
0.3125
0.3803
Thus, based on customer market, the

sites are ranked as follows:
0.5012 (A)
0.5012 (A)
0.1185 (B)
0.3803 (C)
OR
0.3803 (C)
0.1185 (B)
We have to do the same process to the other

3 criteria. The results are as follows:
Income
Level
Infrastructure
Transportation
0.2819 (A)
0.1780 (A)
0.1561 (A)
0.0598 (B)
0.6850 (B)
0.6196 (B)
0.6583 (C)
0.1360 (C)
0.2243 (C)
LET COMBINE ALL 4 CRITERIA TOGETHER.
CRITERIA (CALL THIS MATRIX M)
MARKET
INCOME
LEVEL
INFRATRANS
STRUCTURE PORTATION
0.5012
0.2819
0.1790
0.1561
0.1185
0.0598
0.6850
0.6196
0.3803
0.6583
0.1360
0.2243
THE NEXT, WE WANT TO RANK THE CRITERIA.
WELL ASK THE DM TO FILL THIS TABLE.
IL
IS
TP
1/5
IL
IS
1/3
1/9
TP
1/4
1/7
1/2
WELL DO THE SAME PROCESS AS BEFORE:

NOW, ADD THE VALUES IN EACH COLUMN
IL
IS
TP
1/5
IL
IS
1/3
1/9
TP
1/4
1/7
1/2
TOT
79/12
458/315
27/2
14
NEXT, DIVIDE EACH ENTRY WITH RESPECTIVE

COLUMN SUM.
IL
IS
TP
12/79
315/2290
6/27
4/14
IL
18/27
7/14
IS
2/27
2/14
TP
1/27
1/14
NEXT, WRITE EACH ENTRY INTO DECIMAL FORM.
IL
IS
TP
0.1519
0.1375
0.2222
0.2857
IL
0.6667
0.5000
IS
0.0741
0.1429
TP
0.0370
0.0714
NEXT, TAKE AVERAGE FOR EACH ROW.
IL
IS
TP
0.1519
0.1375
0.2222
0.2857 0.1993
IL
0.6667
0.5000
IS
0.0741
0.1429
TP
0.0370
0.0714
Average
Row
THOSE NUMBERS REFLECT THE RANK FOR THE

CRITERIA. WE ARE SUPPOSE TO HAVE:
ROW AVERAGES(CALL
THIS MATRIX N)
0.1993 (M)
0.6535 (IL)
0.0860 (IS)
0.0612(TP)
NOW WE ARE READY TO DEVELOP AN OVERALL

RANKING. WHAT WE HAVE TO DO IS TO MULTIPLY
MATRIX M AND N.
0.1993
0.5012 0.2819 0.1790 0.1561
0.6535
0.1185 0.0598 0.6850 0.6196
0
.
0860
0.3803 0.6583 0.1360 0.2243
0.0612
WE ARE SUPPOSE TO GET:
Score for site A
Score for site B
Score for site C
0.3091
0.1595
0.5314
REARRANGE ACCORDING TO SCORE:

SCORE FOR SITE C IS 0.5314
SCORE FOR SITE A IS 0.3091
SCORE FOR SITE B IS 0.1595
HUS, SITE C (CYBERJAYA) IS THE BEST CHOICE.
2. Sample Problem
Jilley Bean Co. is selecting a new
location to expand its operations. The
company want to use AHP to help it
decide which location to build its new
plant. Jilley Bean Co. has four criteria
they will base their decision on these
are the following: property price,
distance from suppliers, the quality of
the labor pool, and the cost of labor.
They have three locations to decide
from A , B and C area.
Matrices given criteria and

preferences
PRICE
A
A
2
C
1
B
1/3
1/5
1/2
5
LABOR
A
WAGES
DISTANCE
B
1/6
1/3
1/7
1/3
1/3
1/2
1/9
1/4
Criteria
Price
Labor
Wages
Price
Distance
1/5
1/9
4
Distance
7
Labor
1/3
2
Showing that in preference in price A and C are the equally

Wages
1/4
1/7
1/2
preferred but are preferred over B. 1
The results are . . .

LOCATION
Score
A
B
.3091
.1595
.5314
1.0000
Based on the scored Location C should

be chosen for Jilley Bean Co. to built a
plant.
3. Problem Statement
Purchasing decision, three model alternatives, three
decision criteria.
Pairwise comparison matrices:
Prioritized decision criteria:
Answer
Bike X score = .5057
Bike Y score = .2138
Bike Z score = .2806
Overall ranking of bikes: X first followed by Z and Y (sum of

scores equal 1.0000).
4. Choosing the most satisfied

school
Goal: To select the most satisfied
school.
Criteria: learning, friends, school life,
vocational training, college prep. and
music classes.
Alternatives: School A, school B, and
school C.
Hierarchy:
Goal
Satisfaction with School
Learning
Friends
School
Life
School
A
Vocational
College
Music
Training
Prep.
Classes
School
B
School
C
Pairwise comparisons:
School Selection
L
Learning
F
4
Friends
1/4
School Life
SL
3
VT
1
CP
3
MC Weights
4
.32
1/5
.14
1/3 1/7
1/5
1/5
1/6
.03
Vocational Trng.
1/3
1 1
College Prep.
1/3
.24
Music Classes
1/4
1/3
.14
1/3
.13
Comparison of Schools with Respect

to the Six Characteristics
Learning
A B C
A
1/3 1/2
1/3
Friends
A B C
Priorities
Priorities
.16
.33
.45
.59
.33
1/5
1/5
.09
.25
.33
.46
College Prep.
A B C
Vocational Trng. Priorities
School Life
A B C
Priorities
Music Classes
Priorities
Priorities
.77
1/2
.25
.69
1/9
1/5
.05
.50
1/6
1/3
.09
1/7
.17
1/2
.25
1/4
.22
Overall final outcome

School B is the best school with an
overall priority of 0.38, followed by
school A.
SUPERDECISIONS
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ANALYTIC HIERARCHY

The Analytical Hierarchy Process (AHP)

Preference Scale for Piecewise

Let illustrate AHP by using an example.

The four criteria:

The overall objective of the company is

1. Comparison matrix for customer market:

2. Comparison matrix for income level:

3. Comparison matrix for infrastructure:

4. Comparison matrix for transportation:

Let us do synthesization: decision alternatives

Next, we divide each value in a column by its

Next, change them to decimal and find the

Thus, based on customer market, the

We have to do the same process to the other

LET COMBINE ALL 4 CRITERIA TOGETHER.

CRITERIA (CALL THIS MATRIX M)

THE NEXT, WE WANT TO RANK THE CRITERIA.

WELL ASK THE DM TO FILL THIS TABLE.

WELL DO THE SAME PROCESS AS BEFORE:

NEXT, DIVIDE EACH ENTRY WITH RESPECTIVE

NEXT, WRITE EACH ENTRY INTO DECIMAL FORM.

NEXT, TAKE AVERAGE FOR EACH ROW.

THOSE NUMBERS REFLECT THE RANK FOR THE

NOW WE ARE READY TO DEVELOP AN OVERALL

0.5012 0.2819 0.1790 0.1561

WE ARE SUPPOSE TO GET:

Score for site A

Score for site B

Score for site C

REARRANGE ACCORDING TO SCORE:

HUS, SITE C (CYBERJAYA) IS THE BEST CHOICE.

Matrices given criteria and

Showing that in preference in price A and C are the equally

The results are . . .

Based on the scored Location C should

Prioritized decision criteria:

Overall ranking of bikes: X first followed by Z and Y (sum of

4. Choosing the most satisfied

Comparison of Schools with Respect

Vocational Trng. Priorities

Overall final outcome

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