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Expert Systems with Applications 34 (2008) 1787–1794
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Abstract
Investment evaluation methods play an important role in today’s competitive manufacturing environment. Shrinking profit margins
and diversification require careful analysis of investments and decisions regarding these investments are crucial for the survival of the
manufacturing industry. Both economic evaluation criterion and strategic criteria such as flexibility, quality improvement, which are
not quantitative in nature, are considered for evaluation. Much has been written about the deficiencies of traditional models for justifying
advanced manufacturing systems. The use of fuzzy set theory allows incorporating unquantifiable, incomplete and partially known infor-
mation into the decision model. In this paper, an analytic hierarchical process (AHP) based on fuzzy numbers multi-attribute method is
proposed for the evaluation and justification of an advanced manufacturing system. Finally, an example of machine tool selection is used
to illustrate and validate the proposed approach.
2007 Elsevier Ltd. All rights reserved.
0957-4174/$ - see front matter 2007 Elsevier Ltd. All rights reserved.
doi:10.1016/j.eswa.2007.01.046
1788 O. Durán, J. Aguilo / Expert Systems with Applications 34 (2008) 1787–1794
Table 1
Justification methods for advanced manufacturing technologies
Techniques Advantages Disadvantages
Economic • Payback • Ease in data collection • Do not take into account strategic and non-economic benefits
method • Intuitive appeal • Consider a single objective of cash flows, and ignore other benefits
• ROI such as quality and flexibility
• NPV, IRR
Strategic • Technical • Require less technical data • Necessity to use these techniques with economic or analytic ones
importance • Use the general objectives of the firm since they consider only long-term intangible benefits
• Business
objectives
• Competitive
advantages
• R&D
Analytic • AHP • Uncertainty of the future and the multi- • Require more data
• Mathematical objectivity can be incorporated • Usually more complex than the economic analysis
Programming • Subjective criteria can be introduced in the
• Stochastic modeling phase
methods
• Fuzzy sets
theory
• Short term returns are emphasized rather than long term tification is observed in approximately 60% of the manu-
strategy. facturing firms responding the questionnaire.
• A variety of assumptions are made designed to deal with In the justification process of advanced information or
the uncertainty involved in predicting the future manufacturing systems, quantification of some of the
environment. revenue or quality improvements is often difficult if not
• And, the range of benefits considered is diminished due impossible. Many managers have argued that accounting
to the difficulty in quantifying many important factors. methodologies restrict the adoption and use of advanced
technologies and are incapable of quantifying many of the
According to Shamsuzzaman et al. (2000), numerous benefits offered by these systems in many organizations.
tangible and intangible benefits are expected after the intro- The analytic hierarchy process (AHP) developed by
duction of AMT. Among the intangible benefits one can Saaty (1980) is a decision-making tool that can handle
mention reduced labor costs, high capital utilization, faster unstructured or semistructured decisions with multiperson
throughput times, better quality control, increased safety and multicriteria inputs. It is a decision-rule model that
and a better response to unpredictable situations. relaxes the measurement of related factors to subjective
Sullivan and William (1986) points out the inadequacy managerial inputs on multiple criteria. AHP has several
of traditional financial justification measures of project advantages, including its acceptance of inconsistencies in
worth such as return on investment, payback, and net pres- managerial judgments/perceptions and its user friendliness
ent worth in considering the strategic merits of advanced because users may directly input judgment data without
manufacturing technologies. further requiring mathematical knowledge. It also allows
According Karsak and Tolga (2001), DCF methods users to structure complex problems in the form of a hier-
appear as the most popular economic justification method- archy or a set of integrated levels. AHP can also be com-
ology; however, determining cash flows (revenues, bined with well-known operations research techniques to
expenses) and discount rates as crisp values can lead to handle more difficult problems. One of the main advanta-
erroneous results in most real-life applications. ges of this method is the relative ease with which it handles
The results of the surveys conducted by Lefley (1994) for multiple criteria. In addition to this, AHP is easier to
justification of advanced manufacturing technology understand and can effectively handle both qualitative
(AMT) in the UK, and by Lefley and Sarkis (1997) for and quantitative data. The use of AHP does not involve
appraisal of AMT investments in the UK and US both cumbersome mathematics. AHP involves the principles of
support the difficulty in assessing AMT investments due decomposition, pair wise comparisons, and priority vector
to their non-quantifiable benefits. As a result of this diffi- generation and synthesis. The power of AHP has been val-
culty, over 80% of the respondents in the US and UK point idated by empirical application in diverse areas such as
out that not all potential benefits of AMT investments healthcare, politics, and urban planning (Karsak & Tolga,
are considered in the financial justification process. 2001). It has been used in making decisions that involve
Furthermore, the results of the surveys state that subjective ranking, selection, evaluation, optimization, and prediction
assessment of AMT investment with/without financial jus- (Lee, Lau, Liu, & Tam, 2001).
O. Durán, J. Aguilo / Expert Systems with Applications 34 (2008) 1787–1794 1789
Though the purpose of AHP is to capture the expert’s tive importance of each criterion during the decision
knowledge, the conventional AHP still cannot reflect the process.
human thinking style. In spite of its popularity, this A fuzzy number ~x expresses the meaning ‘about x’. Each
method is often criticized because of a series of pitfalls membership function is defined by three parameters of the
associated with the AHP technique which can be summa- symmetric triangular fuzzy number, (l, m, r), left, middle
rized as follows: and right points of the range over which the function is
defined. Fuzzy membership function and the definition of
• Its inability to adequately handle the inherent uncer- a fuzzy number are shown in Fig. 1.
tainty and imprecision associated with the mapping of When the decision-maker faces a complex and uncertain
the decision-maker’s perception to exact numbers (Lef- problem and expresses his/her comparison judgments as
ley & Sarkis, 1997). uncertain ratios, such as ‘about two times more important’,
• In the traditional formulation of the AHP, human’s ‘between two and four times less important’, etc., the stan-
judgments are represented as exact (or crisp, according dard AHP steps, and specially, eigenvalue prioritization
to the fuzzy logic terminology) numbers. However, in approach, cannot be considered as straightforward proce-
many practical cases the human preference model is dures. Indeed, the assessment of local priorities, based on
uncertain and decision-makers might be reluctant or pair wise comparisons needs some prioritization method
unable to assign exact numerical values to the compari- to be applied. Next a brief description about addition, mul-
son judgments. tiplication and division of triangular numbers is given. The
• Although the use of the discrete scale of 1–9 has the fuzzy operators were adapted from Chiu and Park (1994).
advantage of simplicity, the AHP does not take into Let A and B be two triangular fuzzy numbers, with their
account the uncertainty associated with the mapping parameters as follows:
of one’s judgment to a number.
e ¼ ða1 ; a2 ; a3 Þ
A
In order to overcome the aforementioned shortcomings, e ¼ ðb1 ; b2 ; b3 Þ
B
a fuzzy extension of AHP, was developed to solve the hier-
archical fuzzy problems. In the next sections a Fuzzy-AHP
Then, fuzzy numbers multiplication is defined by
technique is proposed, and an example for the evaluation
and justification of advanced manufacturing system is eB
A e ¼ ða1 b1 ; a2 b2 ; a3 b3 Þ ð1Þ
presented.
At the other hand, fuzzy numbers division is defined as
2. Fuzzy-AHP methodology follows:
The Fuzzy-AHP methodology extends Saaty’s AHP by e B
A= e ¼ ða1 =b3 ; a2 =b2 ; a3 =b1 Þ ð2Þ
combining it with the fuzzy set theory. In the Fuzzy-
AHP, fuzzy ratio scales are used to indicate the relative Whilst the reciprocal value of a triangular fuzzy number
strength of the factors in the corresponding criteria. There- (a, b, c) is given by (1/a, 1/b, 1/c). The power of a triangular
fore, a fuzzy judgment matrix can be constructed. The final fuzzy number is given by
scores of alternatives are also represented by fuzzy num-
bers. The optimum alternative is obtained by ranking the e n ¼ ða1 ; a2 ; a3 Þn ¼ ðan ; bn ; cn Þ
A ð3Þ
1 2 3
fuzzy numbers using special algebra operators.
The next three steps can summarize the procedure of As seen in Fig. 2, the relative importance of a number over
applying Fuzzy-AHP: other fuzzy number is gradual and not abrupt.
Let w
~ i be a set of decision maker’s opinion of the relative
(i) Construct a hierarchical structure for the problem to importance of the one alternative over other one. The
be solved. meaning of each fuzzy number is defined in Table 2.
(ii) Establish the fuzzy judgment matrix and a fuzzy Using this scale we have the comparison matrix A, e
weight vector. where aij elements represent the estimative of the wi/wj
(iii) Rank all alternatives and select the optimal one. relation
~
1
~
3
~
5
~
7
~
9 As the traditional AHP methodology, eigenvector is to
be normalized according the next relation
T ¼ ðw1 =Rwi w2 =Rwi w3 =Rwi ; . . . ; wn =Rwi Þ
where T is the normalized eigenvector. From this normal-
Fig. 2. Saaty’s scale expressed as fuzzy sets. ized eigenvector the priorities or importance of the attri-
butes under analysis is extracted.
Table 2 In order to control the result of the method, the consis-
Saaty’s scale expressed in fuzzy numbers tency ratio [need] * needs * to be calculated. The deviations
Relative importance Definition from consistency are expressed by the following equation:
~
1 Equal importance k max n
~
3 Weak importance CI ¼ ð8Þ
~
n1
5 Strong importance
~
7 Demonstrated importance over the other The consistency ratio (CR) is used to directly estimate the
~
9 Absolute importance consistency of pairwise comparisons. The CR is computed
by dividing the CI by a value obtained from the table of
Random Consistency Index (RI) created by Saaty
f1 =f
w w1 f2 =f
w w1 ... fn =f
w w1
f1 =f
w w2 f2 =f
w w2 ... fn =f
w w2 ð4Þ CR ¼ CI=RI
e¼
A f1 =f
w wn f2 =f
w wn ... fn =f
w wn If the CR is less than 10%, the comparisons are acceptable,
otherwise not. RI represents the average index for ran-
Experts’ judgments or preferences among the options using domly generated weights.
Saaty’s scale is represented now by triangular numbers to Since kmax is a triangular number, it has to be defuzzified
express subjective pairwise comparisons or capture certain into a crisp number to compute the CI. We suggest here
degree of vagueness (Table 3). using the central value of kmax, because of the symmetry
We know that matrix A is a real and positive matrix. As of the triangular number, the central value corresponds
well as, since aij = 1/aji, if i is not equal to j, A is a recipro- to the centroid of the triangular area.
cal matrix.
Next, the eigenvector, eigenvalue and the IC index are 3. Case study
calculated, now taking these parameters as fuzzy numbers.
To estimate the fuzzy eigenvector from A matrix the In this section, the proposed methodology is applied to a
next equation is used case study, in order to prove its applicability and validity.
!1=n
Yn A new CNC turning center investment decision of a given
Vi ¼ aij ð5Þ manufacturer was taken into consideration. A triplet of
j¼1 decisions makers was asked to evaluate a set of three alter-
Therefore, we have natives machine tools (MT1, MT2, MT3). After a set of
interviews, a series of six qualitative attributes was selected
1=n
V 1 ¼ ða
11 a12 a13 a1n Þ ð6Þ to perform the analysis. The six attributes are: flexibility,
operation easiness, reliability, quality, implementation eas-
1=n iness and maintainability. This six attributes are repre-
V n ¼ ða
n1 an2 an3 ann Þ ð7Þ sented by the six following symbols: AT1, AT2, AT3,
Eigenvector Vi is compound by the n triangular numbers AT4, AT5 and AT6 respectively. Once the decision makers
defined as perform the pairwise comparisons for the set of attributes
the A matrix is obtained (Table 3). This comparison matrix
V ¼ ðV 1 ; V 2 ; . . . ; V n Þ
is constructed by using Saaty’s scale but now with triangu-
where Vi is a triangular number defined as (Vl, Vm, Vu). lar numbers.
Table 3
Comparisons matrix of the attributes considered for selection of machine tools
AT1 AT2 AT3 AT4 AT5 AT6
AT1 (1,1,3) (1/5,1,1/3) (5,7,9) (1,3,5) (1,3,5) (5,7,9)
AT2 (1,3,5) (1,1,3) (7,9,9) (1,3,5) (1,3,5) (7,9,9)
AT3 (1/9,1/7,1/5) (1/9, 1/9,1/7) (1,1,3) (1/7, 1/5, 1/3) (1/7, 1/5, 1/3) (1,3,5)
AT4 (1/5,1,1/3) (1/5,1,1/3) (3,5,7) (1,1,3) (1/5,1,1/3) (3,5,7)
AT5 (1/5,1,1/3) (1/5,1,1/3) (3,5,7) (1,3,5) (1,1,3) (3,5,7)
AT6 (1/9, 1/7,1/5) (1/9, 1/9,1/7) (1/5,1,1/3) (1/7, 1/5,1/3) (1/7, 1/5,1/3) (1,1,3)
O. Durán, J. Aguilo / Expert Systems with Applications 34 (2008) 1787–1794 1791
To find the relative importance or priorities of the six (Buckley, 1985; Mikhailov & Tsvetinov, 2004), among
attributes eigenvector, eigenvalue and the RC index are them we propose the utilization of the representative meth-
to be computed. Thus, the eigenvector (with triangular val- od, which is given by the following relation:
ues) is as follows:
b ¼ a1 þ 2a2 þ a3
A ð9Þ
V ¼ ðð1:3 2:3 4:3Þð1:9 3:6 5:6Þð0:3 0:4 0:6Þð0:6 0:98 2:3Þ 4
where A = (a1,a2,a3) is a triangular number and A b repre-
ð0:8 1:4 3:0Þð0:2 0:2 0:5ÞÞ
sents the representative ordinal of a triangular number.
Considering this method, the second element of the
Before performing the normalizations an additional fuzzy eigenvector is the highest value and corresponds to the sec-
ranking procedure is needed in order to compare fuzzy ond attribute (AT2) operation easiness.
scores and to obtain a linear order among them. There The normalization process yields a new form of the
are a number of procedures to perform the ranking process eigenvector in which each entry is a triangular number,
as follows:
Table 4
Fuzzy pairwise comparisons for the alternative machines
V ¼ ðð0:03 0:26 2:42Þð0:04 0:40 3:17Þð0:01 0:04 0:34Þ
Maq1 Maq2 Maq3 ð0:01 0:11 1:30Þð0:02 0:16 1:70Þð0:004 0:03 0:26ÞÞ
AT1
Maq1 (1.00 1.00 3.00) (0.20 0.33 1.00 ) (0.20 0.33 1.00) For testing the consistency of the resulting eigenvector,
Maq2 (1.00 3.00 5.00) (0.20 0.33 1.00) (1.00 3.00 5.00) Saaty proposed the following relation:
Maq3 (1.00 3.00 5.00) (0.20 0.33 1.00) (0.20 0.33 1.00)
kmax ¼ V w ð10Þ
AT2
Maq1 (1.00 1.00 3.00) (0.33 1.00 1.00) (0.33 1.00 1.00) where w is computed by the sum of the columns of the pref-
Maq2 (1.00 1.00 3.00) (1.00 1.00 3.00) (0.33 1.00 1.00) erences matrix
Maq3 (1.00 1.00 3.00) (1.00 1.00 3.00) (1.00 1.00 3.00)
W ¼ ðð2:6 5:0 10:4Þð1:8 2:2 6:3Þð19:2 27:3 36:0Þ
AT3
Maq1 (1.00 1.00 3.00) (3.00 5.00 7.00) (1.00 1.00 3.00) ð4:3 10:4 18:7Þð3:5 7:7 14:7Þð20:0 30:0 40:0ÞÞ
Maq2 (0.14 0.20 0.33) (1.00 1.00 3.00) (0.14 0.20 0.33)
Maq3 (0.33 1.00 1.00) (3.00 5.00 7.00) (1.00 1.00 3.00) Next kmax is calculated by
AT4 kmax ¼ ð4:13 6:47 12:73Þ
Maq1 (1.00 1.00 3.00) (7.00 9.00 9.00) (5.00 7.00 9.00)
Maq2 (0.11 0.11 0.14) (1.00 1.00 3.00) (0.14 0.20 0.33) Then, to calculate the CI (crisp) we used the central value
Maq3 (0.11 0.14 0.20) (3.00 5.00 7.00) (1.00 1.00 3.00) of the triangular number kmax.
AT5 CI ¼ ð6:47 6Þ=5 ¼ 0:09
Maq1 (1.00 1.00 3.00) (0.20 0.33 1.00) (0.33 1.00 1.00)
Maq2 (1.00 3.00 5.00) (1.00 1.00 3.00) (1.00 3.00 5.00) In addition, RC is computed
Maq3 (1.00 1.00 3.00) (0.20 0.33 1.00) (1.00 1.00 3.00)
RC ¼ 0:09=1:24 ¼ 0:07 < 0:10
AT6
Maq1 (1.00 1.00 3.00) (4.00 6.00 8.00) (2.00 4.00 6.00) This proves the total consistency of the evaluations ex-
Maq2 (1.00 3.00 5.00) (1.00 1.00 3.00) (0.20 0.30 1.00) pressed by the comparisons matrix. Based on the weight
Maq3 (0.17 0.25 0.50) (1.00 3.00 5.00) (1.00 1.00 3.00) vector (eigenvector) the priorities or relative importance
of the attributes are as follows: AT2, AT1, AT5, AT4,
AT3 and AT6. Next, the three possible turning centers
were compared with each of the six attributes. The corre-
Table 5
sponding fuzzy pairwise comparison matrices are shown
Eigenvectors of the machine alternatives and their six attributes
in Table 4.
VAT1 ((0.1 0.2 1.0) (0.1 0.5 1.8) (0.1 0.3 1.4))
Next, we can find the scores of the alternative machines
VAT2 ((0.1 0.3 0.8) (0.1 0.3 1.0) (0.1 0.3 1.2))
VAT3 ((0.2 0.4 1.2) (0.1 0.2 0.5) (0.1 0.4 1.0)) and their six attributes, shown in Table 5.
VAT4 ((0.3 0.6 1.1) (0.10.2 0.3) (0.1 0.3 0.6)) The local weights of all machines for each attribute are
VAT5 ((0.1 0.3 1.0) (0.1 0.5 1.8) (0.1 0.3 1.2)) obtained by multiplying their relative weights by the
VAT6 ((0.2 0.5 1.3) (0.1 0.3 0.9) (0.1 0.3 0.8)) weights of the attributes. Table 6 shows these local weights.
Table 6
Local weights for the machine alternatives and their six attributes
AT1 AT2 AT3 AT4 AT5 AT6
Maq1 (0.06 0.22 1.05) (0.09 0.33 0.82) (0.16 0.41 1.22) (0.29 0.57 1.10) (0.07 0.27 1.03) (0.17 0.47 1.27)
Maq2 (0.10 0.46 1.79) (0.11 0.33 0.99) (0.07 0.18 0.51) (0.08 0.15 0.32) (0.10 0.46 1.76) (0.09 0.27 0.87)
Maq3 0.08 0.32 1.37 0.13 0.33 1.19 (0.13 0.41 1.01) (0.13 0.27 0.56) (0.08 0.27 1.23) (0.09 0.26 0.78)
1792 O. Durán, J. Aguilo / Expert Systems with Applications 34 (2008) 1787–1794
Fig. 5. Comparison matrix among projects for each one of the criteria. Fig. 6. Final results.
In the final screen of the system, the results of analysis method and as well as other Fuzzy based approaches for
are shown in Fig. 6. machine tool selection, mainly because of its simplicity
and the possibility of incorporating subjective parameters.
5. Conclusions
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