Technique for Order Preference by Similarity to Ideal Solution (TOPSIS)

 TOPSIS is based on positive and negative ideal solutions.

 Solutions are determined in respect to the distance of each alternative to the best
and the worst performing alternative.
 The alternative ratings and criterion weights, must pass from AHP phase to TOPSIS
phase

TOPSIS method, which is based on choosing the best alternative having the:
1. Shortest distance to the ideal solution
2. Farthest distance from the negative-ideal solution
3. The ideal solution is the solution that maximizes the benefit and also minimizes the
total cost.
4. The negative-ideal solution is the solution that minimizes the benefit and also
maximizes the total cost.

Step 1: Pairwise Comparison Matrix and Consistency Check

A1 Matrix
Style Reliability Fuel Economy Cost

Style 1.00 0.33 0.20 0.33

Reliability 3.00 1.00 0.33 3.00

Fuel Economy 5.00 3.00 1.00 5.00
Cost 3.00 0.33 0.20 1.00

A2 Matrix A3 = A1 x A2 A4 = A3 / A2

Weights Normalized weights

0.386097395 0.07 0.307931 4.237968

1.316074013 0.25 1.027812 4.149866

2.942830956 0.55 2.289392 4.133857

0.668740305 0.13 0.537152 4.268159

5.313742669 lambda 4.197462

Consistancy Index (lambda - 4 )/3 0.065821

Consistancy Ratio CI/RI 0.073134 < 0.1

Step2: Data Collection
Alternatives Style Reliability Fuel Economy Cost
CIVIC 7 9 9 8
SATURN 8 7 8 7
FORD 9 6 8 9
MAZDA 6 7 8 6

Step3:
Alternatives Style Reliability Fuel Economy Cost
CIVIC 7 9 9 8
SATURN 8 7 8 7
FORD 9 6 8 9
MAZDA 6 7 8 6
15.17 14.66 16.52 15.17

Step4: Calculate Normalized decision matrix

Normalized Decision Matrix

Style Reliability Fuel Economy Cost
Alternatives
CIVIC 0.46 0.61 0.54 0.53
SATURN 0.53 0.48 0.48 0.46
FORD 0.59 0.41 0.48 0.59
MAZDA 0.40 0.48 0.48 0.40
Weights 0.07 0.25 0.55 0.13

Step5: Calculate Weighted Normalized Decision Matrix

Alternatives Style Reliability Fuel Economy Cost

CIVIC 0.0335 0.1520 0.3017 0.0664
SATURN 0.0383 0.1182 0.2681 0.0581
FORD 0.0431 0.1013 0.2681 0.0747
MAZDA 0.0287 0.1182 0.2681 0.0498

A+ Best 0.0431 0.1520 0.3017 0.0498

A-Worst 0.0287 0.1013 0.2681 0.0747

Step6: Determine Ideal Solution A+ and A-

A+ = {0.0593, 0.2455, 0.1634, 0.0791}

A- = {0.0396, 0.1637, 0.1453, 0.1187}
Step 7: Determine distance/Separation from ideal solution i.e how far is your alternative
from ideal solution

Distance from Ideal

S1+ Civic 0.0192
S2+ Saturn 0.0485
S3+ Ford 0.0657
S4+ Mazda 0.0497

Distance from Worst

S1- Civic 0.0615
S2- 0.0255
S3- 0.0144
S4- 0.0301

Distance from Ideal in totality

S1+ Civic 0.0295/0.0295+0.0851 0.23756
S2+ Saturn 0.655207
S3+ Ford 0.820407
S4+ Mazda 0.622986

Select the solution whichever is closer to ideal.