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1
M O D U L E

Analytic Hierarchy Process

TEACHING SUGGESTIONS Factor evaluations:

Teaching Suggestion M1.1: Using Multifactor
Factor Sun Hitek Surgo
Decision-Making Techniques.
Many decisions students make involve a number of factors. Thus, Price 0.7 0.6 0.8
multifactor decision-making techniques can be useful and practi- Color 0.9 0.9 0.4
cal. This section can be started by having students give examples Warranty 0.8 0.9 0.4
of decisions that require the analysis of multiple factors. Buying a Size 0.8 0.8 0.2
Brand name 0.9 0.9 0.6
car or stereo and picking the best job offer are examples. Once stu-
dents understand the principles of multiplying factor weights Evaluation of SUN:
times factor evaluations, they will be able to understand the use of
AHP.
Factor Factor Factor Weighted
Teaching Suggestion M1.2: Using AHP. Name Rating Evaluation Evaluation
Have the students describe situations where AHP would be pre-
Price 0.4 0.7 0.28
ferred over the multifactor evaluation process. You may want to Color 0.1 0.9 0.09
take one of these situations and show how pairwise comparisons Warranty 0.1 0.8 0.08
can be made. Students can then be asked to complete the AHP Size 0.1 0.8 0.08
problem and determine the best solution. This can lead to in-class Brand name 0.3 0.9 0.27
discussions on the AHP process. Total 1.0 0.80

SOLUTIONS TO QUESTIONS AND PROBLEMS Evaluation of HITEK:

M1-1. Multifactor decision making is appropriate when a deci- Factor Factor Factor Weighted
sion involves a number of factors. Deciding to buy a house, for ex- Name Rating Evaluation Evaluation
ample, can involve the price, location, taxes, utilities, and so forth.
Price 0.4 0.6 0.24
M1-2. When using multifactor decision making, each factor re- Color 0.1 0.9 0.09
ceives an importance weight. These weights will sum to 1. Then Warranty 0.1 0.9 0.09
every alternative and factor combination will receive a factor eval- Size 0.1 0.8 0.08
uation. The factor weights are multiplied by the factor evaluations Brand name 0.3 0.9 0.27
to get a weighted evaluation for each alternative. The alternative Total 1.0 0.77
with the highest weighted evaluation is selected.
M1-3. The analytic hierarchy process should be used when it is Evaluation of SURGO:
difficult or impossible to determine factor weights and factor eval- Factor Factor Factor Weighted
uations subjectively. In this case, pairwise comparisons are per- Name Rating Evaluation Evaluation
formed to assist in the decision-making process and determine the
Price 0.4 0.8 0.32
best alternative.
Color 0.1 0.4 0.04
M1-4. Here is an analysis of Georges decision. Warranty 0.1 0.4 0.04
Factor weights: Size 0.1 0.2 0.02
Brand name 0.3 0.6 0.18
Factor Importance (Weight) Total 1.0 0.60

Price 0.4
SUN is selected, with the highest total weighted evaluation of
Color 0.1
0.80.
Warranty 0.1
Size 0.1
Brand name 0.3

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270 MODULE 1 ANALYTIC HIERARCHY PROCESS

M1-5. Lindas problem can be analyzed as follows: Consistency information follows:

Weighted sum vector (0.7096 2.0468 0.2460)
Price Car 1 Car 2 Car 3
Consistency vector (3.0011 3.0031 3.0004)
Car 1 2 7
Car 2 4 Lambda 3.0015
Car 3 Value of CI 0.0008
The following will be the priorities for price: RI 0.5800
Priority for car 1 is 0.6025. CR 0.0013
Priority for car 2 is 0.3151. M1-8.
Priority for car 3 is 0.0824.
Factors Price Warranty Style
Consistency information follows:
Price 2 9
Weighted sum vector (1.8096 0.9460 0.2473)
Warranty 6
Consistency vector (3.0035 3.0019 3.0005) Style
Lambda 3.0020
Value of CI 0.0010 The following will be the priorities for the factors:
RI 0.5800 Priority for price is 0.6049.
Priority for warranty is 0.3337.
CR 0.0017
Priority for style is 0.0614.
M1-6.
Consistency information follows:
Warranty Car 1 Car 2 Car 3 Weighted sum vector (1.8246 1.0044 0.1842)
Car 1 1 1
Consistency vector (3.0163 3.0097 3.0016)
3 8
1 Value of CI 0.0046
Car 2 5
RI 0.5800
Car 3
CR 0.0079
The following will be the priorities for warranty: The following are the final rankingsCar 1 is selected.
Priority for car 1 is 0.0768.
Item Ranking
Priority for car 2 is 0.1863.
Priority for car 3 is 0.7370. Car 1 0.4045
Car 2 0.2946
Consistency information follows:
Car 3 0.3008
Weighted sum vector (0.2310 0.5640 2.2825)
Consistency vector (3.0088 3.0276 3.0972) M1-9. The weighted averages of these scores are shown in the
Lambda 3.0445 table. Gina should choose Univesity B.
Value of CI 0.0223 Weighted
Cost Reputation Quality of life Average
RI 0.5800
Weight 0.6 0.2 0.2
CR 0.0384
A 4 9 7 5.6
M1-7. B 8 5 7 7.2
C 7 6 3 6.0
Style Car 1 Car 2 Car 3
Car 1 1 3
Car 2
3
8
M1-10. Using AHP, we have the following matrices.

Car 3 Cost A B C
A 1 0.2 0.333333
The following will be the priorities for style: B 5 1 3
Priority for car 1 is 0.2364. C 3 0.333333 1
Priority for car 2 is 0.6816. Column Total 9 1.533333 4.333333
Priority for car 3 is 0.0820.

Factor Evaluation
Normalized A B C (Row Average)
A 0.1111 0.1304 0.0769 0.1062
B 0.5556 0.6522 0.6923 0.6333
C 0.3333 0.2174 0.2308 0.2605
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MODULE 1 ANALYTICAL HIERARCHY PROCESS 271

Reputation A B C The following will be the priorities for price:

A 1 7 5 Priority for system 1 (S-1) is 0.6039.
B 0.142857 1 0.333333 Priority for system 2 (S-2) is 0.3258.
C 0.2 3 1 Priority for system 3 (S-3) is 0.0703.
Column Total 1.342857 11 6.333333 Consistency information follows:
Weighted sum vector (1.8178 0.9792 0.2109)
Factor Evaluation
Consistency vector (3.0099 3.0056 3.0011)
Normalized A B C (Row Average)
A 0.7447 0.6364 0.7895 0.7235 Lambda 3.0055
B 0.1064 0.0909 0.0526 0.0833 Value of CI 0.0028
C 0.1489 0.2727 0.1579 0.1932 RI 0.5800
CR 0.0048
Quality of Life A B C
A 1 1 5 Brand Name S-1 S-2 S-3
B 1 1 7 S-1 1 6
C 0.2 0.142857 1 S-2 4
Column Total 2.2 2.142857 13 S-3

The following will be the priorities for brand name:

Normalized A B C Factor Evaluation
(Row Average) Priority for system 1 (S-1) is 0.4838.
A 0.4545 0.4667 0.3846 0.4353 Priority for system 2 (S-2) is 0.4232.
B 0.4545 0.4667 0.5385 0.4866 Priority for system 3 (S-3) is 0.0930.
C 0.0909 0.0667 0.0769 0.0782 Consistency information follows:
Weighted sum vector (1.4649 1.2789 0.2794)
Factors Cost Reputation Quality of life Consistency vector (3.0278 3.0220 3.0051)
Cost 1 3 7 Lambda 3.0183
Reputation 0.333333 1 2
Quality of life 0.142857 0.5 1
Value of CI 0.0092
Column Total 1.47619 4.5 10 RI 0.5800
CR 0.0158
Quality Factor Evaluation
Memory S-1 S-2 S-3
Normalized Cost Reputation of life (Row Average)
S-1 1 1
Cost 0.6774 0.6667 0.7000 0.6814 2 7
Reputation 0.2258 0.2222 0.2000 0.2160 1
Quality of life 0.0968 0.1111 0.1000 0.1026 S-2 6

Using the factor weights, we find the following weighted averages S-3
for each university.
The following will be the priorities for memory:
Cost Reputation Quality Weighted
Priority for system 1 (S-1) is 0.0919.
of life Average
Priority for system 2 (S-2) is 0.1535.
A 0.1062 0.7235 0.4353 0.2733
Priority for system 3 (S-3) is 0.7545.
B 0.6333 0.0833 0.4866 0.4995
C 0.2605 0.1932 0.0782 0.2272 Consistency information follows:
Weights 0.6814 0.2160 0.1026 Weighted sum vector (0.2765 0.4631 2.3192)
Consistency vector (3.0078 3.0164 3.0736)
Therefore, Gina should choose University B.
Lambda 3.0326
Value of CI 0.0163
M1-11. The analysis to determine which computer system is to RI 0.5800
be selected is as follows: CR 0.0281

Price S-1 S-2 S-3 Speed S-1 S-2 S-3

S-1 1 2
S-1 2 8 3
S-2 5 S-2 5
S-3 S-3
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272 MODULE 1 ANALYTIC HIERARCHY PROCESS

Table for Factors for Problem M1-11

Brand PC
Factors Price Name Memory Speed Flexibility Compatibility
Price 9 4 5 3 2
Brand name 1 1 1 1
2 4 5

Memory 2 1 1
2 6

Speed 1 1
3 6

Flexibility 1
2
PC compatible

The following will be the priorities for speed: Consistency information follows:
Priority for system 1 (S-1) is 0.2299. Weighted sum vector (2.1717 0.2371 0.6218)
Priority for system 2 (S-2) is 0.6479. Consistency vector (3.0389 3.0040 3.0122)
Priority for system 3 (S-3) is 0.1222.
Lambda 3.0184
Consistency information:
Value of CI 0.0092
Weighted sum vector (0.6902 1.9485 0.3667)
RI 0.5800
Consistency vector (3.0026 3.0071 3.0013)
CR 0.0158
Lambda 3.0037
The following will be the weights for the factors:
Value of CI 0.0018
Weight for price is 0.3849
RI 0.5800 Weight for brand name is 0.0447
CR 0.0032 Weight for memory is 0.0816
Weight for speed is 0.0514
Flexibility S-1 S-2 S-3 Weight for flexibility is 0.149
1 1
Weight for PC compatibility is 0.288
S-1
2 8 See the table for factors for Problem M1-11.
1
S-2 4 Consistency information follows:

S-3 Weighted sum vector 2.39 0.275 0.493
0.312 0.918 1.801
The following will be the priorities for flexibility:
Priority for system 1 (S-1) is 0.0909.
Priority for system 2 (S-2) is 0.1818.
Consistency vector = 6.0592
6.2208 6.1480 6.0362
6.1485 6.2518
Priority for system 3 (S-3) is 0.7273.
Value of CI 0.0288
Consistency information follows:
RI 1.2400
Weighted sum vector (0.2727 0.5455 2.1818)
CR 0.0232
Consistency vector (3.0000 3.0000 3.0000)
The following are the final rankingssystem 1 (S-1) is
Lambda 3.0000 selected.
Value of CI 0.0000
RI 0.5800 Item Ranking

CR 0.0000 System 1 (S-1) 0.4928

System 2 (S-2) 0.2400
System 3 (S-3) 0.2671
PC Compatibility S-1 S-2 S-3
S-1 8 4
S-2 1
3
S-3

The following will be the priorities for PC compatibility:

Priority for system 1 (S-1) is 0.7146.
Priority for system 2 (S-2) is 0.0789.
Priority for system 3 (S-3) is 0.2064.