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    Analytic Hierarchy Process

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    ragingwildfire
    The document describes the Analytic Hierarchy Process (AHP) and goal programming methods for decision making. AHP involves pairwise comparisons to rank decision alternatives based on multiple objectives. Goal programming involves minimizing deviations from goal targets, with higher priority goals satisfied before lower ones. The steps are to define goals and variables, constraints, and a prioritized objective function minimizing deviations. Graphical analysis solves problems by satisfying constraints in priority order to minimize higher-level deviations.

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    Analytic Hierarchy Process

    Uploaded by

    ragingwildfire
    67 views25 pages
    The document describes the Analytic Hierarchy Process (AHP) and goal programming methods for decision making. AHP involves pairwise comparisons to rank decision alternatives based on multiple objectives. Goal programming involves minimizing deviations from goal targets, with higher priority goals satisfied before lower ones. The steps are to define goals and variables, constraints, and a prioritized objective function minimizing deviations. Graphical analysis solves problems by satisfying constraints in priority order to minimize higher-level deviations.

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    Ahp Lecture

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    The document describes the Analytic Hierarchy Process (AHP) and goal programming methods for decision making. AHP involves pairwise comparisons to rank decision alternatives based on multiple objectives. Goal programming involves minimizing deviations from goal targets, with higher priority goals satisfied before lower ones. The steps are to define goals and variables, constraints, and a prioritized objective function minimizing deviations. Graphical analysis solves problems by satisfying constraints in priority order to minimize higher-level deviations.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PPT, PDF, TXT or read online from Scribd
    Download as ppt, pdf, or txt
    67 views25 pages

    Analytic Hierarchy Process

    Uploaded by

    ragingwildfire
    The document describes the Analytic Hierarchy Process (AHP) and goal programming methods for decision making. AHP involves pairwise comparisons to rank decision alternatives based on multiple objectives. Goal programming involves minimizing deviations from goal targets, with higher priority goals satisfied before lower ones. The steps are to define goals and variables, constraints, and a prioritized objective function minimizing deviations. Graphical analysis solves problems by satisfying constraints in priority order to minimize higher-level deviations.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PPT, PDF, TXT or read online from Scribd
    Download as ppt, pdf, or txt
    of 25

    Analytic Hierarchy Process

    Developed by Thomas L. Saaty, published in his

    book The Analytic Hierarchy Process in 1980 A method for ranking decision alternatives and selecting the best one when the decision maker has multiple objectives or criteria on which to base the decision. Goal programming gives us a mathematical quantity that aims to satisfy a set of goals. The output of GP answers the question how much? The output of AHP is a prioritized ranking of decision alternatives.

    Steps in AHP
    1. Decision maker develops a graphical

    representation of the problem. The hierarchy reveals the factors to be considered as well as the various alternatives in the decision.
    2. Two alternatives are compared according to a

    criterion and one is preferred. The following preference scale is used. This process is known as Pairwise Comparison.

    Preference Scale for Pairwise Comparison

    Steps in AHP
    3. Prioritize alternatives with respect to each

    criterion. This step in AHP is referred to as synthesization. The mathematical procedure for synthesization is very complex and beyond the scope of this course. Instead, we will use an approximation method for synthesization that provides a reasonably good estimate of preference scores for each decision in each criterion.

    Steps in AHP
    4. The next step in AHP is to determine

    the relative importance, or weight, of the criteria that is, to rank the criteria from most important to least important. This is accomplished the same way we ranked the sites within each criterion: using pairwise comparisons

    Steps in AHP
    5. Multiply the output of step 3 with

    step 4. The output of this step is an overall ranking of each alternative.

    Steps in Developing Goal Programming Model


    3. Define the decision variables. 4. Formulate the constraints in the

    usual linear programming fashion. 5. For each goal, develop a goal equation, with the RHS specifying the target value for the goal. Deviation variables di+ and di- are included in each goal equation to reflect the possible deviations above or below the target value.

    Steps in Developing Goal Programming Model


    6. Write the objective function in terms

    of minimizing a prioritized function of the deviation variables.

    Extension to Equally Important Multiple Goals


    Now Harrisons management wants to achieve

    several goals of equal in priority Goal 1: to produce a profit of $30 if possible during the production period Goal 2: to fully utilize the available wiring department hours Goal 3: to avoid overtime in the assembly department Goal 4: to meet a contract requirement to produce at least seven ceiling fans

    Extension to Equally Important Multiple Goals


    The deviational variables are

    d1 = underachievement of the profit target d1+ = overachievement of the profit target d2 = idle time in the wiring department (underutilization) d2+ = overtime in the wiring department (overutilization) d3 = idle time in the assembly department (underutilization) d3+ = overtime in the assembly department (overutilization) d4 = underachievement of the ceiling fan goal d4+ = overachievement of the ceiling fan goal

    Extension to Equally Important Multiple Goals


    Because management is unconcerned about d1+,

    d2+, d3, and d4+ these may be omitted from the objective function The new objective function and constraints are

    Minimize total deviation = d1 + d2 + d3+ + d4


    subject to 7X1 + 6X2 + d1 d1+ = 30 2X1 + 3X2 + d2 d2+ = 12 6X1 + 5X2 + d3 d3+ = 30 X2 + d4 d4+ = 7 All Xi, di variables 0 (profit constraint) (wiring hours) (assembly hours) (ceiling fan constraint)

    Ranking Goals with Priority Levels


    In most goal programming problems, one goal

    will be more important than another, which will in turn be more important than a third Goals can be ranked with respect to their importance in managements eyes Higher-order goals are satisfied before lowerorder goals Priorities (Pis) are assigned to each deviational variable with the ranking so that P1 is the most important goal, P2 the next most important, P3 the third, and so on

    Ranking Goals with Priority Levels


    Harrison Electric has set the following priorities

    for their four goals


    GOAL Reach a profit as much above $30 as possible Fully use wiring department hours available PRIORITY P1 P2

    Avoid assembly department overtime


    Produce at least seven ceiling fans

    P3
    P4

    Ranking Goals with Priority Levels


    This effectively means that each goal is infinitely

    more important than the next lower goal With the ranking of goals considered, the new objective function is Minimize total deviation = P1d1 + P2d2 + P3d3+ + P4d4
    The constraints remain identical to the previous

    ones

    Solving Goal Programming Problems Graphically


    We can analyze goal programming

    problems graphically We must be aware of three characteristics of goal programming problems


    1. Goal programming models are all minimization problems 2. There is no single objective, but multiple goals to be attained 3. The deviation from the high-priority goal must be minimized to the greatest extent possible before the next-highest-priority goal is considered

    Solving Goal Programming Problems Graphically


    Recall the Harrison Electric goal programming

    model Minimize total deviation = P1d1 + P2d2 + P3d3+ + P4d4 subject to 7X1 + 6X2 + d1 d1+ = 30 (profit ) 2X1 + 3X2 + d2 d2+ = 12 (wiring ) 6X1 + 5X2 + d3 d3+ = 30 (assembly ) X2 + d4 d4+ = 7 (ceiling fans) All Xi, di variables 0 (nonnegativity) where X1 = number of chandeliers produced X2 = number of ceiling fans produced

    Solving Goal Programming Problems Graphically


    To solve this we graph one constraint at a time

    starting with the constraint with the highestpriority deviational variables In this case we start with the profit constraint as it has the variable d1 with a priority of P1 Note that in graphing this constraint the deviational variables are ignored To minimize d1 the feasible area is the shaded region

    Solving Goal Programming Problems Graphically


    Analysis of
    X2 7 Minimize Z = P1d1

    the first goal

    6
    5 4 3 2 1 Figure 11.4 0
    |

    d1+

    d1
    | | |

    7X1 + 6X2 = 30
    | |

    X1

    Solving Goal Programming Problems Graphically


    The next graph is of the second priority goal of

    minimizing d2 The region below the constraint line 2X1 + 3X2 = 12 represents the values for d2 while the region above the line stands for d2+ To avoid underutilizing wiring department hours the area below the line is eliminated This goal must be attained within the feasible region already defined by satisfying the first goal

    Solving Goal Programming Problems Graphically


    Analysis of
    X2 7 Minimize Z = P1d1 + P2d2

    first and second goals

    6
    5 4 3 2X1 + 3X2 = 12 2 d2+ 1 d1+

    7X1 + 6X2 = 30
    Figure 11.5 0
    | | | |

    d2
    | |

    X1

    Solving Goal Programming Problems Graphically


    The third goal is to avoid overtime in the

    assembly department We want d3+ to be as close to zero as possible This goal can be obtained Any point inside the feasible region bounded by the first three constraints will meet the three most critical goals The fourth constraint seeks to minimize d4 To do this requires eliminating the area below the constraint line X2 = 7 which is not possible given the previous, higher priority, constraints

    Solving Goal Programming Problems Graphically


    Analysis of
    X2 7 d4+ d4 d3+ d3 d1+ d2+ C 6X1 + 5X2 = 30 B 1 2X1 + 3X2 = 12 X2 = 7

    all four priority goals

    6 A
    5 D 4 3 2

    Minimize Z = P1d1 + P2d2 + P3d3 + P4d4

    7X1 + 6X2 = 30
    Figure 11.6 0
    | | | | | |

    X1

    Solving Goal Programming Problems Graphically


    The optimal solution must satisfy the first three

    goals and come as close as possible to satisfying the fourth goal This would be point A on the graph with coordinates of X1 = 0 and X2 = 6 Substituting into the constraints we find d1 = $0 d2 = 0 hours d3 = 0 hours d4 = 1 ceiling fan d1+ = $6 d2+ = 6 hours d3+ = 0 hours d4+ = 0 ceiling fans

    A profit of $36 was achieved exceeding the goal

    Graphical Solution Procedure Goal Programming Model


    1. Identify the feasible solution points;

    these are the ones that satisfy the problem constraints. 2. Identify all feasible solutions that achieve the highest priority goal; if there are no feasible solutions that will achieve the highest-priority goal, identify the solution(s) that comes closest to achieving the highest priority goal.

    Graphical Solution Procedure Goal Programming Model


    3. Move down one priority level and

    determine the best solution possible without sacrificing any achievement of higher-priority goals. 4. Repeat step 3 until all priority levels have been considered.

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