Home | Meetings | Contact List | Committees | Documents | Mapping | Photo Gallery | Search | Links

Multi Criteria Decision Modeling

Preference Ranking
The Analytical Hierarchy Process

Decisions... Decisions

Why is AHP needed?

• It is difficult to conceptualize all elements of a problem.
• You may leave important elements out - or unimportant ones in!
• It is difficult to keep track of your priorities.

This leads to INCONSISTENT DECISIONS!

Major Advantages

1. Active community involvement and participation in decision making processes
2. Incorporation of economic and social; objective and subjective considerations into decision making (i.e. integrated decision making)
3. Provides a theoretical basis for consistent decision making

This tool is used:

1. to elicit preferences for certain objectives relative to other objectives
2. to give the best, or several best, solutions from a range of potential solutions

General Form

• a goal or the focus of a problem
• a finite number of alternative plans or options
• a set of criteria by which alternatives are to be judged, and
• a method of ranking the alternatives based on how well they satisfy the objective

General Structure of a Problem

Decision makers are asked...

When comparing criterion 1 to criterion 2, ...
‘Which is more important?’
‘Which has a greater impact?’
‘Which is more likely to happen?’ or
‘Which is more preferred?’

… The nature of the question depends on the desired outcome and level being compared

Use this scale to articulate preferences

Numerical Value 1 3 5 7 9 2,4,6,8 Reciprocals

Definition Equally important or preferred Slightly more important or preferred Strongly more important or preferred Very strongly more important or preferred Extremely more important or preferred Intermediate values to reflect compromise Used when the second criterion is dominant

Structure of the problem

Number of Jobs: quantity of the jobs
Average Wage or Salary: quality of the jobs
Level of Capital Investment: measure of permanency
Impacts of Population Growth: social impact (traffic, public services)
Level of Utility Requirements: pubic impact (infrastructure)
Cleanliness of Industry: environmental impact
Value added Multipliers: local economic impact

Through pairwise comparisons the relative importance of the different impacts can be expressed. This includes those impacts that are subjective in nature.

Decision Makers are Asked:

When comparing the number of jobs offered by a firm to the average wage level offered by a firm how important of a consideration is one impact over the other with respect to the attractiveness of a firm?

When comparing the number of jobs offered by a firm to the level of capital investment offered by a firm, how important of a consideration is one impact over the other with respect to the attractiveness of a firm?

When comparing the number of jobs offered by a firm to the impacts of population growth, how important of a consideration is one impact over the other with respect to the attractiveness of a firm?

… Etcetera, until each criterion has been compared to all other criteria

Pairwise Comparison Practice Run

Judgement Matrix

	# Jobs	Avg. Pay	Prop. Value	Cleanliness
# Jobs	1.000 # # # 1/# 1.000 # # 1/# 1/# 1.000 # 1/# 1/# 1/# 1.000
Avg. Pay
Prop. Value
Cleanliness

Expert Choice Software

Pairwise Comparison Results

Inconsistency Ratio (IR) - a ratio or percentage of time decision makers are inconsistent in making judgements on a set of particular elements.

How do I interpret an IR?
Range:

• 0.0 perfect consistency, inconsistent 0% of the time
• 1.0 no consistency, inconsistent 100% of the time

(1) Priority weights can be used as information themselves for preference information - what is most preferred by the group

(2) Priority weights can be applied to a set of data related to the criteria, to give the best alternative from a range of specific alternatives.

Proposed Process

This web site is hosted  by CARES- University of Missouri - Columbia
This web site is maintained jointly by the Saline County Study Steering Committee and CARES
For problems or questions regarding this web contact the Saline County Steering Committee or  Chris Fulcher (CARES).
Last updated: November 14, 1999