Decision making with the Analytic Hierarchy Process

Abstract

In this paper, an introduction is given to the decision-making theory, the Analytic Hierarchy Process (AHP). In the AHP, a decision hierarchy is constructed with a goal, criteria and alternatives. The criteria are pairwise compared for their importance with respect to the goal to derive a scale of relative importance and the alternatives are pairwise compared with respect to each criterion to derive relative scales. The relative scales are synthesized using a weighting and adding process to show which is the best alternative. Judgment is used to make the pairwise comparisons. Data can also be used directly in the pairwise comparisons if there is no need to assess or interpret the value represented by the numbers. This process works well for intangibles with no existing scales of measurement. Even when measurement scales and data using these scales exist, it is often advantageous to use judgment to interpret it. Two concepts integral to the AHP, measurement and consistency, are explained. Finally, the ideas and the method are illustrated through an example.