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==Criticisms==
==Criticisms==
Despite its widespread use and popularity as a decision method, the AHP has been the subject of criticisms, notably about the possibility of different hierarchies being applied to identical problems; about possible major changes in results if the hierarchy is changed in minor ways; and about the absence of statistical theory to underlie the process.
Despite its widespread use as a decision method, the AHP has been the subject of criticisms, notably about the possibility of different hierarchies being applied to identical problems; about possible major changes in results if the hierarchy is changed in minor ways; and about the absence of statistical theory to underlie the process. In spite of these concerns, the process works well in practice and is extremely popular among decision-makers in the private and public sectors.<ref> {{Citation| first=J.E. | last=de Steiguer| coauthors=Jennifer Duberstein, Vicente Lopes| contribution=The Analytic Hierarchy Process as a Means for Integrated Watershed Management| title=First Interagency Conference on Research on the Watersheds| editor-first=Kenneth G.| editor-last=Renard| coeditors=et al| publisher=U.S. Department of Agriculture, Agricultural Research Service| place=Benson, Arizona| pages=736-740| date=October, 2003| year=| id= | contribution-url=http://www.tucson.ars.ag.gov/icrw/Proceedings/Steiguer.pdf| format=| accessdate= }}</ref>


A series of debates between critics and proponents of AHP have been published in peer reviewed journals, most notably in Management Science<ref>Dyer, J. S. (1990): Remarks on the Analytic Hierarchy Process. In: Management Science, 36 (3), S. 249-258.</ref><ref>M. V. Mikhalevic "Remarks on the Dyer-Saaty controversy" Cybernetics and Systems Analysis,Volume 30, Number 1 / January, 1994 </ref><ref>Patrick T. Harker, Luis G. Vargas, "Reply to 'Remarks on the Analytic Hierarchy Process' by J. S. Dyer", Management Science, Vol. 36, No. 3 (Mar., 1990), pp. 269-273</ref><ref>Dyer, J.S. (1990b), "A clarification of ‘Remarks on the analytic hierarchy process’", Management Science, Vol. 36 No.3, pp.274-5.</ref> and The Journal of the Operations Research Society <ref>Holder, R.D., Some Comment on the Analytic Hierarchy Process, Journal of the Operational Research Society, 1990, 41, 11 1073-1076. </ref><ref>Thomas L. Saaty "Response to Holder's Comments on the Analytic Hierarchy Process" The Journal of the Operational Research Society, Vol. 42, No. 10 (Oct., 1991), pp. 909-914</ref><ref>R. D. Holder "Response to Holder's Comments on the Analytic Hierarchy Process: Response to the Response" The Journal of the Operational Research Society, Vol. 42, No. 10 (Oct., 1991), pp. 914-918</ref>.
A series of debates between critics and proponents of AHP have been published in peer reviewed journals, most notably in Management Science<ref>Dyer, J. S. (1990): Remarks on the Analytic Hierarchy Process. In: Management Science, 36 (3), S. 249-258.</ref><ref>M. V. Mikhalevic "Remarks on the Dyer-Saaty controversy" Cybernetics and Systems Analysis,Volume 30, Number 1 / January, 1994 </ref><ref>Patrick T. Harker, Luis G. Vargas, "Reply to 'Remarks on the Analytic Hierarchy Process' by J. S. Dyer", Management Science, Vol. 36, No. 3 (Mar., 1990), pp. 269-273</ref><ref>Dyer, J.S. (1990b), "A clarification of ‘Remarks on the analytic hierarchy process’", Management Science, Vol. 36 No.3, pp.274-5.</ref> and The Journal of the Operations Research Society <ref>Holder, R.D., Some Comment on the Analytic Hierarchy Process, Journal of the Operational Research Society, 1990, 41, 11 1073-1076. </ref><ref>Thomas L. Saaty "Response to Holder's Comments on the Analytic Hierarchy Process" The Journal of the Operational Research Society, Vol. 42, No. 10 (Oct., 1991), pp. 909-914</ref><ref>R. D. Holder "Response to Holder's Comments on the Analytic Hierarchy Process: Response to the Response" The Journal of the Operational Research Society, Vol. 42, No. 10 (Oct., 1991), pp. 914-918</ref>.

Revision as of 04:07, 9 November 2007

The Analytic Hierarchy Process (AHP) is a structured technique for dealing with complex decisions. Based on mathematics and human psychology, it was developed by Thomas L. Saaty in the 1970s and has been extensively studied and refined since then. The AHP provides a comprehensive and rational framework for structuring a problem, for representing and quantifying its elements, for relating those elements to overall goals, and for evaluating alternative solutions. It is used throughout the world in a wide variety of decision situations, in fields such as government, business, industry, healthcare, and education.

Users of the AHP first decompose their decision problem into a hierarchy of more easily comprehended sub-problems, each of which can be analyzed independently. The elements of the hierarchy can relate to any aspect of the decision problem—tangible or intangible, estimated or carefully measured, well- or poorly-understood—anything at all that applies to the decision at hand.

Once the hierarchy is built, the decision makers systematically evaluate its various elements, comparing them to one another in pairs. In making the comparisons, the decision makers can use their judgments about the elements' relative meaning and importance, or they can use concrete data about the elements. It is the essence of the AHP that human judgments, and not just the underlying information, can be used in performing the evaluations.

The AHP converts the judgments to numerical values that can be processed, evaluated and compared over the entire range of the problem. A numerical weight or priority is derived for each element of the hierarchy, allowing diverse and often incommensurable elements to be compared to one another in a rational and consistent way. This capability distinguishes the AHP from other decision making techniques.

At the end of the process, numerical priorities are derived for each of the decision alternatives. It is then a simple matter to pick the best alternative, or to rank them in order of relative preference.

Uses and applications

While it can be used by individuals working on straightforward decisions, AHP is most useful where teams of people are working on complex problems, especially those with high stakes, involving human perceptions and judgments, whose resolutions have long-term repercussions.[1] It has unique advantages where important elements of the decision are difficult to quantify or compare, or where communication among team members is impeded by their different specializations, terminologies, or perspectives. Computer software is available to assist in the application of the process.

The applications of AHP to complex decision situations have numbered in the thousands,[2] and have produced extensive results in problems involving alternative selection, planning, resource allocation, and priority setting.[1] Many such applications are never reported to the outside world, because they take place at high levels of large organizations where security and privacy considerations prohibit their disclosure. But some uses of AHP are discussed in the literature. Recently these have included:

AHP was recently applied to a project that uses video footage to assess the condition of highways in Virginia. Highway engineers first used it to determine the optimum scope of the project, then to justify its budget to lawmakers.[8]

The process is widely used in countries around the world. At a recent international conference on AHP, over 90 papers were presented from 19 countries, including the U.S., Germany, Japan, Chile, Malaysia, and Nepal. Topics covered ranged from Establishing Payment Standards for Surgical Specialists, to Strategic Technology Roadmapping, to Infrastructure Reconstruction in Devastated Countries.[9] AHP was introduced in China in 1982, and its use in that country has expanded greatly since then—its methods are highly compatible with the traditional Chinese decision making framework, and it has been used for many decisions in the fields of economics, energy, management, environment, traffic, agriculture, industry, and the military.[10]

Though using AHP requires no specialized academic training, the subject is widely taught at the university level—one AHP software provider lists over a hundred colleges and universities among its clients.[11] AHP is considered an important subject in many institutions of higher learning, including schools of engineering[12] and graduate schools of business.[13] AHP is also an important subject in the quality field, and is taught in many specialized courses including Six Sigma, Lean Six Sigma, and QFD.[14][15][16]

In China, nearly a hundred schools offer courses in AHP, and many doctoral students choose AHP as the subject of their research and dissertations. Over 900 papers have been published on the subject in that country, and there is at least one Chinese scholarly journal devoted exclusively to AHP.[10]

Summary

The procedure can be summarized as:

  1. The alternatives and the significant attributes are identified.
  2. For each attribute, and each pair of alternatives, the decision makers specify their preference (for example, whether the location of alternative "A" is preferred to that of "B") in the form of a fraction between 1/9 and 9.
  3. Decision makers similarly indicate the relative significance of the attributes. For example, if the alternatives are comparing potential real-estate purchases, the investors might say they prefer location over price and price over timing.
  4. Each matrix of preferences is evaluated by using eigenvalues to check the consistency of the responses. This produces a "consistency coefficient" where a value of "1" means all preferences are internally consistent. This value would be lower, however, if a decision maker said X is preferred to Y, Y to Z but Z is preferred to X (such a position is internally inconsistent). It is this step that that causes many users to believe that AHP is theoretically well founded.[citation needed]
  5. A score is calculated for each alternative.


Criticisms

Despite its widespread use as a decision method, the AHP has been the subject of criticisms, notably about the possibility of different hierarchies being applied to identical problems; about possible major changes in results if the hierarchy is changed in minor ways; and about the absence of statistical theory to underlie the process. In spite of these concerns, the process works well in practice and is extremely popular among decision-makers in the private and public sectors.[17]

A series of debates between critics and proponents of AHP have been published in peer reviewed journals, most notably in Management Science[18][19][20][21] and The Journal of the Operations Research Society [22][23][24].

In these debates, AHP critic J. Dyer argues:

"The AHP is flawed as a procedure for ranking alternatives in that the rankings produced by this procedure are arbitrary."[25]

Anoather AHP critic, R. D. Holder also concludes in 1991 that:

"Thus questions about th validity of AHP are far from having been settled. Also, it is clear that such discussion over a long period has not sufficiently penetrated the AHP users' community, with the result that paper are still being published using a faulty method."[26]

However, even while criticizing AHP, Holder finds room for possible improvement in AHP when he states in the same source:

"No amount of empirical evidence can truly validate a theory with such internal contradictions as the originally constituted AHP, though the theory is a good basis from which to develop."

Of the weaknesses found in AHP, the use of arbitrary scales and certain internal inconsistencies and theoretical flaws have been discussed extensively in the literature.

The Use of Arbitrary Scales

AHP is based on pairwise comparisons where the relative importance of different attributes are given a value on a scale of 1 to 9 or the inverse (1/9th to 1). These values are in practice assigned by verbal elicitation of decision makers. For example, if a person says attribute A is "moderately more imporantant" than attribute B, A is said to have a relative weight of 3 time that of B while being "extremely more important" will give A a weight of 9 times that of B. While this scale is commonly used in AHP, it is arbitrary and alternative scales have been proposed. Empirical research has found "...that the perceived meaning of the verbal expressions varies from one subject to the next and also depends on the set of elements involved in the comparison." [27]. However, these researchers felt the problem was correctable in that the scales could be based on empirical evidence of AHP user perceptions.

Rank Reversal

AHP, like many systems based on pairwise comparisons, can produce "rank reversal" outcomes. That is a situation where the order of preference is, for example, A, B, C then D. But if C is eliminated for other reasons, the order of A and B could be reversed so that the resulting priority is then B, A, then D. It has been proven that any pairwise comparison system will still have rank-reversal solutions even when the pair preferences are consistent. Critics of AHP characterize this as a fundamental flaw while proponents have argued both that 1) rank reversal in **should** occur in some situations and that 2) where rank reversal is illogical it can be corrected. [28][29]

Inducement of Nonexistent Order

Another problem is the inducement of "nonexistant order" by innocuous changes even without the addition or deletiion of suboptimal alternatives. AHP critic Stan Schenkerman writes in Decision Sciences:

"An apparently unreported problem facing decision makers who use AHP is described [in this paper]. It is demonstrated that conventional AHP and some of its variants (the ideal mode, and the pairwise aggregated approach, PAHAP) can induce ordering even when no order exists. It is also shown that all three approaches can induce different orderings and that the orderings are sensitive to innocuous changes. Thus, even absent addition or deletion of alternatives, the decision maker relying on AHP or these variants can be seriously misled." [30]

Alternatives to AHP

Many alternatives to AHP are economically viable, especially for larger, riskier decision. Methods from decision theory and various economic modeling methods can be applied.

See also

Thomas L. Saaty, developer of the Analytic Hierarchy Process.

References

  1. ^ a b Bhushan, Navneet (January, 2004). Strategic Decision Making: Applying the Analytic Hierarchy Process. London: Springer-Verlag. ISBN 1-8523375-6-7. {{cite book}}: Check date values in: |date= (help); Unknown parameter |coauthors= ignored (|author= suggested) (help)
  2. ^ a b de Steiguer, J.E. (October, 2003), "The Analytic Hierarchy Process as a Means for Integrated Watershed Management" (PDF), in Renard, Kenneth G. (ed.), First Interagency Conference on Research on the Watersheds, Benson, Arizona: U.S. Department of Agriculture, Agricultural Research Service, pp. 736–740, retrieved 2007-08-20 {{citation}}: Check date values in: |date= (help); Unknown parameter |coauthors= ignored (|author= suggested) (help); Unknown parameter |coeditors= ignored (help)
  3. ^ Berrittella, M. (January, 2007), "An Analytic Hierarchy Process for the Evaluation of Transport Policies to Reduce Climate Change Impacts" (PDF), Fondazione Eni Enrico Mattei (Milano), retrieved 2007-08-20 {{citation}}: Check date values in: |date= (help); Cite has empty unknown parameter: |coeditors= (help); Unknown parameter |coauthors= ignored (|author= suggested) (help)
  4. ^ McCaffrey, James (June, 2005). "Test Run: The Analytic Hierarchy Process". MSDN Magazine. Retrieved 2007-08-21. {{cite journal}}: Check date values in: |date= (help); Cite has empty unknown parameter: |coauthors= (help)
  5. ^ Grandzol, John R. (August, 2005). "Improving the Faculty Selection Process in Higher Education: A Case for the Analytic Hierarchy Process" (PDF). IR Applications. 6. Retrieved 2007-08-21. {{cite journal}}: Check date values in: |date= (help); Cite has empty unknown parameter: |coauthors= (help)
  6. ^ Atthirawong, Walailak (September, 2002), "An Application of the Analytical Hierarchy Process to International Location Decision-Making" (PDF), in Gregory, Mike (ed.), Proceedings of The 7th Annual Cambridge International Manufacturing Symposium: Restructuring Global Manufacturing, Cambridge, England: University of Cambridge, pp. 1–18, retrieved 2007-08-20 {{citation}}: Check date values in: |date= (help); Unknown parameter |coauthors= ignored (|author= suggested) (help); Unknown parameter |coeditors= ignored (help)CS1 maint: date and year (link)
  7. ^ Dey, Prasanta Kumar (November, 2003). "Analytic Hierarchy Process Analyzes Risk of Operating Cross-Country Petroleum Pipelines in India". Natural Hazards Review. 4 (4): 213–221. Retrieved 2007-08-20. {{cite journal}}: Check date values in: |date= (help); Cite has empty unknown parameter: |coauthors= (help)
  8. ^ Larson, Charles D. (January, 2007), "Application of the Analytic Hierarchy Process to Select Project Scope for Videologging and Pavement Condition Data Collection", 86th Annual Meeting Compendium of Papers CD-ROM, Transportation Research Board of the National Academies, retrieved 2007-08-20 {{citation}}: Check date values in: |date= (help); Cite has empty unknown parameter: |coeditors= (help); Unknown parameter |coauthors= ignored (|author= suggested) (help)
  9. ^ "Participant Names and Papers, ISAHP 2005, Honolulu, Hawaii". July, 2005. Retrieved 2007-08-22. {{cite web}}: Check date values in: |date= (help)
  10. ^ a b Sun, Hongkai (July, 2005), "AHP in China" (PDF), in Levy, Jason (ed.), Proceedings of the 8th International Symposium on the Analytic Hierarchy Process, Honolulu, Hawaii, retrieved 2007-08-20 {{citation}}: Check date values in: |date= (help); Cite has empty unknown parameters: |coeditors= and |coauthors= (help)CS1 maint: date and year (link)
  11. ^ "List of Expert Choice education clients". Retrieved 2007-08-23.
  12. ^ Drake, P.R. (1998). "Using the Analytic Hierarchy Process in Engineering Education" (PDF). International Journal of Engineering Education. 14 (3): 191–196. Retrieved 2007-08-20. {{cite journal}}: Cite has empty unknown parameter: |coauthors= (help)
  13. ^ Bodin, Lawrence (January, 2004). "Exercises for Teaching the Analytic Hierarchy Process". INFORMS Transactions on Education. 4 (2). Retrieved 2007-08-20. {{cite journal}}: Check date values in: |date= (help); Unknown parameter |coauthors= ignored (|author= suggested) (help)
  14. ^ Hallowell, David L. (January, 2005). "Analytical Hierarchy Process (AHP) -- Getting Oriented". iSixSigma.com. Retrieved 2007-08-21. {{cite journal}}: Check date values in: |date= (help); Cite has empty unknown parameter: |coauthors= (help)
  15. ^ "Analytic Hierarchy Process (AHP)". QFD Institute. Retrieved 2007-08-21. {{cite journal}}: Cite has empty unknown parameter: |coauthors= (help)
  16. ^ "Analytical Hierarchy Process: Overview". TheQualityPortal.com. Retrieved 2007-08-21. {{cite journal}}: Cite has empty unknown parameter: |coauthors= (help)
  17. ^ de Steiguer, J.E. (October, 2003), "The Analytic Hierarchy Process as a Means for Integrated Watershed Management" (PDF), in Renard, Kenneth G. (ed.), First Interagency Conference on Research on the Watersheds, Benson, Arizona: U.S. Department of Agriculture, Agricultural Research Service, pp. 736–740 {{citation}}: Check date values in: |date= (help); Unknown parameter |coauthors= ignored (|author= suggested) (help); Unknown parameter |coeditors= ignored (help)
  18. ^ Dyer, J. S. (1990): Remarks on the Analytic Hierarchy Process. In: Management Science, 36 (3), S. 249-258.
  19. ^ M. V. Mikhalevic "Remarks on the Dyer-Saaty controversy" Cybernetics and Systems Analysis,Volume 30, Number 1 / January, 1994
  20. ^ Patrick T. Harker, Luis G. Vargas, "Reply to 'Remarks on the Analytic Hierarchy Process' by J. S. Dyer", Management Science, Vol. 36, No. 3 (Mar., 1990), pp. 269-273
  21. ^ Dyer, J.S. (1990b), "A clarification of ‘Remarks on the analytic hierarchy process’", Management Science, Vol. 36 No.3, pp.274-5.
  22. ^ Holder, R.D., Some Comment on the Analytic Hierarchy Process, Journal of the Operational Research Society, 1990, 41, 11 1073-1076.
  23. ^ Thomas L. Saaty "Response to Holder's Comments on the Analytic Hierarchy Process" The Journal of the Operational Research Society, Vol. 42, No. 10 (Oct., 1991), pp. 909-914
  24. ^ R. D. Holder "Response to Holder's Comments on the Analytic Hierarchy Process: Response to the Response" The Journal of the Operational Research Society, Vol. 42, No. 10 (Oct., 1991), pp. 914-918
  25. ^ Dyer, J. S. (1990): Remarks on the Analytic Hierarchy Process. In: Management Science, 36 (3), S. 249
  26. ^ R. D. Holder "Response to Holder's Comments on the Analytic Hierarchy Process: Response to the Response" The Journal of the Operational Research Society, Vol. 42, No. 10 (Oct., 1991), pp. 914-918
  27. ^ MARI A. PÖYHÖNEN, RAIMO P. HÄMÄLÄINEN, AHTI A. SALO "An Experiment on the Numerical Modelling of Verbal Ratio Statements" Journal of Multi-Criteria Decision Analysis,vol 6, no 1, ppg 1-10, 1997
  28. ^ Dyer, J. S. (1990): Remarks on the Analytic Hierarchy Process. In: Management Science, 36 (3), S. 249-258.
  29. ^ Simon French "Decision Theory: An Introduction to the Mathematics of Rationality", Ellis Horwood, Chichester, 1988.
  30. ^ Stan Schenkerman "Inducement of nonexistent order by the analytic hierarchy process", Decision Sciences, Spring 1997
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