Multiple Criteria Decision Making:

Analytic Hierarchy
Process

Introduction
vThe AHP was developed by Thomas L Saaty
vIts a powerful tool for complex decision making process
v3 basic functions of AHP:
Structuring complexity using hierarchies
Measurements on a ratio scale
Synthesis

Steps in AHP
v Define the problem
v Structure a hierarchy representing the problem. Arrange goals,
attributes, criteria, sub-criteria, issues, activities, alternatives, etc in
a hierarchy
v Perform pairwise comparison judgment on elements at each level of
the hierarchy with respect to another element higher up the
hierarchy. This process produces a series of pairwise comparison
matrices at each level of hierarchy
v Compute local weights of the elements at each level with respect to
an element higher up the hierarchy. Check for inconsistencies,
revise the pairwise comparison if necessary
v Use hierarchical composition to combine the weights to obtain the
global weights for the alternatives
v Review the model and repeat any part as required

Priority or preference weight

vDegree of importance or priority is expressed in terms of
weight
The weights are usually normalized
sum weights = 1
vSuppose we have n alternatives or criteria to compare,
we seek a vector w = [w1, w2, , wn]T

Pairwise comparison matrix

v Suppose we have n items to compare, the pairwise comparison
reciprocal matrix,
a11 a12 ! a1n
a a ! a
2 n
A = 21 22
= aij
"

a
a
!
a
nn
n1 n 2

[ ]

each element aij =

wi
wj

v Matrix A must satisfied the followings to be valid:

The entries of A must be positive
The matrix A is reciprocal matrix with aij = aji-1 for all i, j
The diagonal elements of A are always one, i.e. aii = 1, for all i

Pairwise comparison matrix (contd)

v Input requirements to construct the A-matrix:
In general, given n objects, n(n-1)/2 number of comparisons are
needed
v Perfectly consistent A-matrix
A perfectly consistent pairwise comparison matrix is a valid Amatrix such that
aij =

aik
= aik akj for all i,j, and k
a jk

Example
1

A = 2

13

1 6

1 1
6
2

Relation between A and w

vGiven perfectly consistent matrix A,
w1
w1 nw1
a11 a12 " a1n w1 w1
" w1
w2
wn
a a " a w w1

w
nw

21
22
2
n
2
2
2
= !
=
= nw
Aw =

!
!
! !

wn
wn

wn

"
w
w
nw
a
a
"
a

w2
wn n n
nn n
n1 n 2
w1
Aw = nw
( A nI ) w = 0

Computing w when A is given

v If A is perfect pairwise comparison matrix, then w may be computed
by normalizing any column of A, i.e.
aij
wi = n
for any j
akj
k =1

v But usually A is imperfect since its based on human judgment

v The best estimate for w can be estimated from the relation (AI)w=0 where is a constant that is approximately equal to n
v But from linear algebra, and w are the eigenvalue and eigenvector
of A respectively
v It can be shown that a positive reciprocal matrix has only one real
dominant eigenvalue which shall be denoted as max

Example
vConsider the matrix A which is imperfect

1 1 / 3 1 / 2

A = 3 1
3
2 1 / 3 1
vFind the value of and w!

The scale of pairwise comparison

v Saatys intensity of importance scale

The Consistency Index(CI)

v Errors or inconsistency in judgments cannot be totally avoided
v However, we must ensure that A-matrix do not contain too much
inconsistencies
v Define CI of matrix A as

CI =

max n
n 1

v Note that actually CI is a measure of inconsistency (not

consistency)

The CI and the 10% rule

v Consider a positive reciprocal matrix of size n>2 whose entries are
randomly selected from the 9-point scale
v These matrices are those with the highest inconsistency
v The average CI values for these matrices are called Random
Indices (RI) and are given below

The CI and the 10% rule (contd)

v Define Consistency Ratio (CR) of A to be:

CI of A
CR =
RI for size n
v The 10% Rule of Practice:
A matrix with CR 0.1 is typically considered acceptable
If CR > 0.1, there is a need to reassess some of the entries to
reduce the level of inconsistencies

Improving consistency of pairwise

comparisons
If an A-matrix has CR >> 0.1, then we need to fix it
1. Check for any clerical errors

Also check the reciprocity property

2. Check for homogeneity

3. Check for unintentional violation of transitivity
4. Check for local consistency

Identify element that contributes the most to the overall

inconsistency
Two measures of error can be computed for each aij

eij =

aij w j

w i

eij = 1 for no error

ij =| aij w j w i | ij = 0 for no error

Approximate computation
methods
vWhen n is large and there is no suitable computing
facility is available to do a full eigenvalue and vector
computation, it is possible to get a good approximation
to the weights
vKnown approximation methods:
Row Geometric Mean Method
Column Normalization Method

Row Geometric Mean Method

v Procedure:
Compute the geometric mean of each row of A
Normalize the numbers obtain in Step 1 to obtain w
An approximate value of is obtained by finding the product of
any ith row of A and the column vector w and then dividing by wi

v Justification:
Given the following nn A-matrix:

The geometric mean of the ith row i

i = n

w1 w1 w1 w2 ! w1 wn
w w w w ! w w
2
2
2
n
2 1
"

wn w1 wn w2 ! wn wn

wi wi
w
wi
! i =
= Kwi
n
w1 w2 wn
w1w2!wn

K = constant

Row Geometric Mean Method

(contd)
vBy normalizing the i, we can retrieve the values of wi
vNote that if the original A-matrix is completely consistent,
this method gives the exact weights
vStep 3 computes since (Aw = w) = [Aw]i/wi for
any i, where [Aw]i is simply the product of the ith row of A
and the column vector w. an estimate of is given by
n

a w
ij

j =1

wi

for any i

Example

Column normalization method

vProcedures:
Normalize each column in the A-matrix
Compute the averages across each row of the matrix
to obtain w
Estimate as in the row GM method using all the
rows of A and compute the average

Example

Comparison among methods

Exact method
(eigenvector)

Geometric Mean
Method

Column
Normalization
Method

w1

0.1571

0.1571

0.1593

w2

0.5936

0.5936

0.5889

w3

0.2493

0.2493

0.2518

3.0536

3.0536

3.0539

Geometric Mean Method provides better results than the column

normalization method

The AHP procedure:

constructing the hierarchy
vJob selection problem:

vLevel 1: goal
vLevel 2: criteria that contribute towards achievement of
the goal in level 1
vLevel 3: the alternatives under consideration

Constructing hierarchy (contd)

Performing the judgments and

computing the local weights
v Perform pairwise comparison of level 2 elements with respect to
level 1, i.e. evaluate the contributions of each of the six criteria
towards achieving the goal Job satisfaction

v Compute max and w

max = 6.42, CI = 0.084069, CR= 0.067797
w = [0.158408 0.189247 0.197997 0.04831 0.150245 0.255792]

Performing the judgments and

computing the local weights
vPerform pairwise comparison of level 3 elements (i.e.
the alternative jobs) with respect to each of the six
criteria in level 2

Summary

Choose company A

General hierarchies

Tree
hierarchy

Tree hierarchy: example

We pairwise compare the 6 criteria with respect to the goal and

obtain the same weights as before
The two subcriteria with respect to growth:

Tree hierarchy: example (contd)

Tree hierarchy: example (contd)

Tree hierarchy: example (contd)

vResult:
Job A, global weight = 0.452
Job B, global weight = 0.296
Job C, global weight = 0.252

The rating approach

v To evaluate or rank a very large number of alternatives or subjects,
i.e. evaluating employees in a company
v A hierarchy is developed in the usual way down to the level of
criteria or sub-criteria
v The criteria are prioritized in the usual way and their weights
expressed in distributive form
v Each of the leaf criteria or sub-criteria is then given set of intensity
ratings, such as excellent, good, average, etc.
v The type and number of intensity ratings for each criterion may be
different
v These ratings are then prioritized by pairwise comparisons to
determine their relative importance with respect to the measured
criteria the weights are expressed in ideal form
v Alternatives are independently evaluated

Example: evaluation of employees

Example: evaluation of employees

In ideal form

Example: evaluation of employees

Example: evaluation of employees

Rank reversal
v Consider the following example:

Note:
The rank is
reversed
although we did
not revise the
relative
weights!!

Why does tank reversal occur?

v Rank reversal is not unique to AHP as it is not because of the
eigenvector computations, because of the 9-point scale, nor
because of inconsistency in judgments
v Rank reversal can take place with any technique that decomposes
and synthesizes in a relative fashion, regardless of whether it uses
pairwise comparisons, eigenvector calculations, or demand perfect
consistency
v Rank reversal occurs because of an abundance or dilution effect (or
what has also been called a substitution effect). Value or worth is,
more often than not, affected by relative abundance or scarcity

When should rank reversal be allowed?

vIf the system is a closed system where a fixed amount of
resources to be distributed, then the distributive
synthesis is appropriate and rank reversal should be
allowed
This is called the distributive mode of AHP
vIf the system is an open system where resources can be
added or removed, then ideal synthesis is appropriate
and rank reversal will not happen
This is called the ideal mode of AHP
vTry the previous example using ideal mode! no rank
reversal
vExpert choice supports both distributive and ideal mode