RightChoiceDSS

AHP Overview

Making the right decision is often difficult considering the often complex and various driving factors that affect the decision. The decision process can be filled with political and personal biases are many times subjective and very hard to defend, and developing group consensus and buy-in can be very difficult.

RightChoiceDSS is a decision support application that utilizes the analytic hierarchy process (AHP), developed at the Whatron School of Business by Thomas Saaty (Saaty, Thomas L. 1980. The Analytic Hierarchy Process ) , that allows decision makers to model a complex problem in a hierarchical structure showing the relationships of the goal, objectives (criteria), sub-objectives, and alternatives. Using the application of data, experience, insight and intuition in a logical and thorough way it enables decision makers to derive rational scale priorities while incorporating both objective and subjective considerations.

The Analytic Hierarchy Process

The analytic hierarchy process (AHP) is a process that allows for the application of data, experience, insight and intuition in a logical and thorough way enabling decision-makers to derive priorities (weights) in a rational way as opposed to arbitrarily assigning them while incorporating both object and subjective considerations.

The process uses several techniques:

• Hierarchical structuring of complex decision. The decision model begins with a goal and a set of criteria that is organized into objectives.
• Pairwise comparisons to rationally evaluate the relative importance of each criterion against the other criteria and alternatives.
• Redundant judgments of the criterion and alternatives.
• Eigenvector method for deriving the weights and consistency indices.

The process is based on solid foundational principals:

• The decomposition principal of breaking complex decision down into manageable units of cluster, sub-clusters, and so on.
• Comparative judgments for evaluating the relative importance of the criteria and how well the alternatives satisfy the criteria by constructing pairwise comparisons of all combinations of elements in a cluster with respect to the cluster parent.
• Hierarchic composition or synthesis of priorities for calculating the weights of the objectives and the scores for the alternatives by multiplying the local priorities of elements in a cluster by the "global" priority of the parent element, producing global priorities for the lowest level elements (alternatives).

AHP theory's primary axioms:

• The reciprocal axiom Pc(Ea,Eb) = 1/Pc(Ea,Eb)
• The homogeneity axiom that states that elements being compared should not differ by too much otherwise large errors will occur.
• The independency axiom that states that elements in the hierarchy do not depend on lower level elements allowing the application of the hierarchy composition.

The AHP process can be used in a variety of decision support applications and is not necessarily limited to determining the best alternative for a decision but can also be used to simply prioritize criteria.