Analytical Hierarchy Process Resources
AHP – Analytic Hierarchy Process (or Analytical Hierarchy Process) is a method of multi-criteria evaluation for organizing and supporting complex decisions.
AHP was developed at the Wharton School of Business by Dr. Thomas Saaty in 1970s. Since then, AHP has been successfully used in thousands of organizations around the world. Many years of deployments has shown the effectiveness of AHP in business and governmental decision making.
AHP is like a democracy – there are people who seek out and publicize its weakness, but nobody so far has invented anything better. There are many methods promoted as the successor of AHP, but none of them gained such popularity and crowd of users as the traditional AHP. Most of AHP weaknesses (e.g. rank reversal) have been resolved many years ago and don't bother users of modern AHP software.
Distinctive features of Analytic Hierarchy Process
Hierarchy of criteria. AHP lets you organize criteria in the form of hierarchy - from the most general to the specific ones. This allows you to better organize the factors influencing the decision. Other multi-criteria decision making (MCDM) methods typically are based on the list of criteria.
Pair-wise comparisons. AHP allows you to enter information about your preferences in a very intuitive way. It involves comparing elements in pairs: identifying the dominant one and determining the degree of dominance in the nine point scale (other MCDM methods often require support from the specialized decision analyst).
AHP Software
If you are looking for the Analytic Hierarchy Process software please visit AHP software page
You will find there:
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Screens of AHP Software
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Demo Video Presenting AHP Software
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Online Demo of AHP Software
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Free Trial of AHP Software
Find out more about software for AHP
AHP Models
If you are looking for the Analytical Hierarchy Process models please visit AHP models page
You will find there:
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AHP Applications
As a result of AHP you get a utility value for each of the analyzed alternatives.
This may have different applications:
- Single choice decisions – choose an alternative with the highest utility e.g. selection of factory location
- Multi-choice decisions – select certain number alternatives from the top of ranking e.g. selection of new product ideas
- Ranking decisions – use the value of the utility to sort the alternatives from best to worst e.g. ranking of markets.
- Prioritization – actual result of AHP e.g. projects prioritization
- Resource allocation – use priorities and allocate resources in the most rational way e.g. budgeting and Capital Planning
- Benchmarking – comparing ourselves with competitors.
AHP Tutorial
Step 1. Defining alternatives
Define a list of alternatives that will be evaluated with Analytical Hierarchy Process. Depending on the type of decision it will be a list of e.g. projects, employees, investments, locations, suppliers, contractors.
Step 2. Organizing criteria with AHP hierarchy
Build a hierarchy of criteria in the context of which you will evaluate alternatives. Start with the most general and move down to more specific. Examples might be: cost, quality, delivery, testimonials, warranty, technical capabilities, reliability, location managers.
Step 3. Weighting of criteria with AHP pair-wise comparisons
Determine weights of criteria by comparing them in pairs. Weights determine the importance of alternatives' utilities in the context of specific criteria. The more important criterion is the greater influence on the result.
Step 4. Evaluation of alternatives with AHP pair-wise comparisons or direct rating
Evaluate alternatives in the context of specific criteria. For this purpose, you can compare them in pairs such as criteria (which is typical for traditional AHP), but you can also rate them directly.
You already know weights of criteria, so you know, which alternatives' evaluations will have the greatest impact on the decision. Now it is worth taking advantage of this knowledge. Ensure an extremely reliable evaluation of alternatives in the context of the most important criteria.
Step 5. Utilities of alternatives in AHP
When you have compared criteria and evaluated alternatives in a context of all criteria, the program calculates and displays the results. The most important result is a chart presenting alternatives' utilities.
Step 6. Sensitivity analysis in AHP
It is worth analyzing the sensitivity of the results. This allows you to check how the outcome changes depending on changes in criteria weights.
For example, when you choose the best option then check which changes in the weights will change the first position in the ranking.