Analytic Hierarchy Process in Multiple–Criteria Decision–Making: A Model Example

Abstract

Managers have to make decisions several times a day. The decision-making process can be defined as an essential activity realized by managers every day. Decisions can be implemented intuitively, or by using relevant decision-making methods. This depends on the nature of the decision, as well as the intensity of its possible future effects. The theory of decision-making can be defined as a relatively young discipline. It can be stated that decision-making is no longer an intuitive process. Most decision-making situations are of a multiple criteria character. In this contribution, the authors focus on multiple-criteria decision-making, to which several methods can be applied. In the practical part, the authors use Saaty's method, also known as the Analytic Hierarchy Process. Saaty is considered to be the most important researcher dealing with the issue of multiple-criteria decision-making. The set multiple-criteria decision-making problem was to choose one business partner out of eight under consideration. The decision-making criteria included selected financial indicators and non-financial criteria. The aim of the contribution is to use the Analytic Hierarchy Process to assess potential business partners and to select an optimal candidate.

Application of the Water Service Sustainability Index to water services in sub-Saharan Africa: the case studies of eight councils in the Southern region of Cameroon (Central Africa)

“…The AHP was used because of its simplicity. It facilitates the decomposition of the problem into a hierarchical structure and ensures that the qualitative and quantitative aspects of the problem are taken into account simultaneously in the evaluation process where expert judgments are taken into account through an even comparison matrix (Saaty 1980;Siekelova et al 2021). The weights of the various indicators were established by following the steps and procedures recommended by Saaty (1990), including the development of the hierarchy structure, pairwise comparisons, the establishment of the pairwise comparison matrix, the calculation of priority…”

Analytic Hierarchy Process, Sensitivity Analysis, and Selectivity of Alphabutol Operation in 1-Butene Production

“…e calculations made by AHP can often be influenced by the expertise of decision-makers, which means that the AHP should be regarded as an instrument that can convert the assessments made by the decision-maker into a multi-criterion ranking (qualitative and quantitative). Furthermore, the AHP is straightforward so the decision-maker has no need to construct a sophisticated expert method [10]. In contrast, the AHP can require a number of user feedbacks, especially in case of problems with various requirements and choices.…”

“…e number of comparisons combined with the number of parameters and alternatives actually increases quadratically [10]. In addition, the sensitivity analysis is a critical step in deciding whether the solution is stable and implementable when constructing models using the analytic hierarchy process.…”

A Practical Application of the Analytic Hierarchy Process and Integer Linear Programming for Fuzzy Front-End Project Selection

“…e rst stream focuses on concept selection, also known as idea evaluation, in the front end of the innovation process [1][2][3][4][5]. e second stream of literature demonstrates applications of the analytic hierarchy process (developed by Saaty) in project selection [1,[6][7][8], for di erent industries such as IT (information systems) [9], energy [10], computing and automation [11], and research and development [12]. e third stream emphasizes the use of mathematical models [13][14][15] in the context of decision-support tools to solve project selection problems.…”