L e s s o n

TheAnalyticHierarchyProcess(AHP)
2
InthisExercise
Constructhierarchicalrepresentationofaproblem.
ConstructPairwiseMatrices.
NormalizethePairwiseMatrices.
CalculatePriorityVectors.
SynthesizeWeightsandcalculateoverallrankingsofAlternatives.
UsespecializedsoftwareDecisionMaker.
Duration:100minutes

TheProblem
Inthefirst exerciseabout AHPmethod,asimplemulticriteriadecisionmaking problemis examined
andsolvedstepbystep.Theproblemtobesolvedistheselectionofthecellphonethatbestcovers
theneedsofAlexandros,astudentofInternationalHellenicUniversity.
Alexandrossomeweeksnowisthinkingtobuyanewcellphone.Afteranextensivemarketresearch
hehasfinallyconcludedinthreedifferentmodelsthatmoreorlessfulfillhisneeds.Itisdifficultfor
himthoughttomakethefinaldecisionasallofthemaretopmodels,sohedecidestocometoyou
andaskyourhelp.Heknowsyouareanexpertindecisionmakingasrecentlyyouhavelearnedthat
AHPmethod.Nowyouwillhavetoapplyyourknowledgeandguideyourfriendtothebestdecision.

PartA
Doingallthecalculations

Thesolution
1. An important part of the AHP methodology is to model the problem correctly. So you asked
Alexandrostotellyousomemoredetailsabouthispreferences.Themostimportantfeaturefor
AlexandrosistheCamera.Helikestotakepicturessothereisaneednotjustforhighresolution
(8megapixelsandbeyond),butalsothereisdemandforthesameimageprocessingcapabilities
foundincurrentdigitalstillandvideocameras.Anotherimportantaspectisthebatterytiming,
as it is essential for a busy guy like him. Charging of the cell phone device is a liability and he
cannotperformthisjoboften.Attheendhetoldyouhowmuchfascinatedheisbytouchscreen
cellphones.Touchscreencellphoneshaveusuallylargescreenwithhighresolution,andgivea
wonderful feeling that you are able to connect to the world literally at a touch of a finger.
TheAnalyticHierarchyProcess(AHP)
Alexandrosalsotoldyouthathehasconcludedamongthree differentmodels,thatallofthem
havethosefeaturesmoreorless.
Now that you know a little bit more things about the problem you can start applying the AHP
methodology to solve it. First step as mentioned above is to model the problem into a
hierarchicalstructure.Quicklyyouconstructthefollowinghierarchy thatshowsclearly,whatis
theGoal,theCriteriaandtheAlternativesofAlexandrosproblem.

Picture 1: The AHP hierarchy for Alexandros buying decision. The Goal is blue, the Criteria are
yellow and the Alternatives are green. All the Alternatives three different models of cell phones
areshownbelowthelowestlevelofeachcriterion.

2. The second step in AHP is to define the relative importance of the Criteria. This is done by
comparing each possible pair of Criteria and ranking them on the following scale : Comparing
CriterionIandCriterionj,giveavaluea
ij
withthefollowingmeaning:

a
|j
Description
1 Element and i ]areequallyimportant
3 Element isweaklymoreimportantthan i ]
5 Element isstronglymoreimportantthan i ]
7 Element isverystronglymoreimportantthan i ]
9 Elementiisabsolutelymoreimportantthan]

Table1:Pairwisecomparisonvalues.
2 InternationalHellenicUniversity
ParaskevopoulosKonstantinos

TheAnalyticHierarchyProcess(AHP)
iisassumedtobeatleastasimportantas],ando
]
issetto1,andifo
]
ism,theno
]
=
1
m
.
NowitistimetoaskAlexandrostocompareinpairsandratealltheCriteriawithrespecttothe
Goal of the problem. Alexandros after some thinking, comes up with some ratings that you
organizedinthefollowingmatrix:

B
a
t
t
e
r
y

C
a
m
e
r
a

T
o
u
c
h

s
c
r
e
e
n

Battery 1 1/4 3
Camera 4 1 7
Touchscreen 1/3 1/7 1

Table2:PreferencesoftheAlternatives
infavorofnodeBuyanewcellphone.

Next due to AHP method you will have to make some calculations to determine the overall
weight that Alexandros is assgnining to each Criterion. There are two methods to do that. The
first one is to find the Normalized Ratings Matrix and the other one a little bit more time
consuming is to find the eigenvector. Here we will work with the first method so we will
calculatetheNormalizedRatingsMatrix.
3. Normalizetheprioritymatrixbydividingeachelementbythesumofthecolumnitappearsin.
Forinstanceo
11
entrywouldendupas:
1
1 + 4 + u.SSS
= u.187
Theotherentriesbecome:

B
a
t
t
e
r
y

C
a
m
e
r
a

T
o
u
c
h

s
c
r
e
e
n

A
v
e
r
a
g
e

Battery 0.188 0.179 0.273

0.213
Camera 0.750 0.718 0.636

0.701
Touchscreen 0.063 0.103 0.091

0.085
Sum=1
3 InternationalHellenicUniversity
ParaskevopoulosKonstantinos

TheAnalyticHierarchyProcess(AHP)
Table3:WeightsonCriteria.
Thatmeansthat70%oftheCriterionweightisonCamera,about20%isonBatteryand8%ison
Touchscreen.ItisclearlythatAlexandrospreferstheCameraovertheBatterytimingandtouch
screen.
4. The next step is to evaluate all the cell phone models on each of the cell phones features. For
exampleAlexandrostoldyouthattheBatteryefficiencyofModelAismuchbiggerthanthatof
Model B and the Battery of Model C is slightly bigger than Model B. You value those
characteristicswiththefollowingmatrix:

M
o
d
e
l

M
o
d
e
l

M
o
d
e
l

ModelA 1 4 3
ModelB 1/4 1 1/2
ModelC 1/3 2 1

Table4:Batteryscoresfromeachmodel.
Again you normalize the scoring table dividing each element by the sums of the columns, and
average across rows to get the relative weights of each model regards to Battery. You end up
withthefollowingtable:

M
o
d
e
l

M
o
d
e
l

M
o
d
e
l

A
v
e
r
a
g
e

ModelA 0.632 0.571 0.667

0.623
ModelB 0.158 0.143 0.111

0.137
ModelC 0.210 0.286 0.222

0.239
Sum=1

Table5:RelativeBatteryscoresfromeachmodel.
ThismeansthatModelAhasthestrongestbatteryastheweightis62%,followedby24%of
ModelCand13%ofModelB.
GoingthroughasimilarprocesswithCameraandTouchscreenwegetthefollowingmatrices:
4 InternationalHellenicUniversity
ParaskevopoulosKonstantinos

TheAnalyticHierarchyProcess(AHP)

M
o
d
e
l

M
o
d
e
l

M
o
d
e
l

ModelA 1 5 3
ModelB 1/5 1 1/4
ModelC 1/3 4 1

Table6:Camerascoresfromeachmodel.

M
o
d
e
l

M
o
d
e
l

M
o
d
e
l

A
v
e
r
a
g
e

ModelA 0.652 0.500 0.706

0.619
ModelB 0.130 0.100 0.059

0.096
ModelC 0.217 0.400 0.235

0.284
Sum=1

Table7:RelativeCamerascoresfromeachmodel.

M
o
d
e
l

M
o
d
e
l

M
o
d
e
l

ModelA 1 0.333 0.143

ModelB 3.000 1 0.500
ModelC 7.000 2.000 1

Table8:Touchscreenratingsfromeachmodel.

5 InternationalHellenicUniversity
ParaskevopoulosKonstantinos

TheAnalyticHierarchyProcess(AHP)

M
o
d
e
l

M
o
d
e
l

M
o
d
e
l

A
v
e
r
a
g
e

ModelA 0.091 0.100 0.087

0.093
ModelB 0.273 0.300 0.304

0.292
ModelC 0.636 0.600 0.609

0.615
Sum=1

Table9:RelativeTouchscreenscoresfromeachmodel.
5. Wecannowplacealltheoverallweightsonthehierarchymodelfrompicture1andgetamore
clearpictureofhowmucheachelementinthemodelcountsinthefinaldecision.

6. Wecannowgetafinalvalueforeachcellphonemodel:
ThevalueforModelAis:
(0.623*0.213)+(0.619*0.701)+(0.093*0.085)=0.133+0.434+0.008=0.575

ThevalueforModelBis:
(0.137*0.213)+(0.096*0.701)+(0.292*0.085)=0.029+0.068+0.025=0.122

ThevalueforModelCis:
(0.239*0.213)+(0.284*0.701)+(0.615*0.085)=0.051+0.199+0.052=0.303

6 InternationalHellenicUniversity
ParaskevopoulosKonstantinos

TheAnalyticHierarchyProcess(AHP)
The winner is Model A cell phone, as it fits 57.5% the needs of Alexandros comparing with the
othertwomodels.

7 InternationalHellenicUniversity
ParaskevopoulosKonstantinos

TheAnalyticHierarchyProcess(AHP)
PartB
Usingspecializedsoftware.

InthispartthesolutiontotheproblemSelectanewcellphoneisgivenusingspecializedsoftware
namedDecisionMaker.

1. Runtheprogram(JavaRuntimeEnvironmentneeded).
2. Sincenowyouareopeningtheprogramthetreecanvasareashouldbeempty.Selectthenode
GoalandfromtheleftmenuclickEditnode.ThedialogEditnodewillshow.
3. In the Node name text field type Buy cell phone. If you like type a short description of the
nodeinthefieldNodeDescription,asitisshowninthefollowingcapture:

4. In the following steps we will build

the hierarchy of the problem as
presented in Part A. With the root
node selected click the button
Insert new node on the left menu.
ThedialogAddnewproblemnode
will come up as shown in the
following capture. This dialog allows
toinsertanewnodeintheproblemshierarchy,aswellastosetthepropertiesofthisnewnode
8 InternationalHellenicUniversity
ParaskevopoulosKonstantinos

TheAnalyticHierarchyProcess(AHP)
such as node name, node type (Goal, Criteria, Alternative), and the information type that this
nodewillhold(eitherQualitativeorQuantitativeinformation).
5. InthetextfieldNewnodename,typeBattery.
6. InthefieldNewnodetype,selectCriteria(onlythevalueCriteriaisavailablefornowasitis
forbiddentoinsertanAlternativenodeintherootnode).
7. In the field Information type, select the value Qualitative as the Battery criterion holds
Qualitativeinformation.
8. ClickOktoinsertthenode,anddoubleclicktherootnodetoshowthenewinsertednode.
9. Repeat the steps 47 to insert the nodes Camera and Touch screen in the root node. Now
thehierarchystructureshouldlookliketheoneinthefollowingcapture.Takeamomenttosee
thecommentsinthatcaptureandwhatthedifferencesintheappearanceofthenodesmean.

10. NowitistimetoinsertinthehierarchytheAlternativenodesasshowninPartAofthisexercise.
SelectaleafnodefromthehierarchythenclickthebuttonInsertnewnodeplacedontheleft
side of the window. The familiar dialog Insert new node appears. Type Model A for the
name of the node select Alternative for the type and for the information type leave as is the
valueParentnodetype
11. Click Ok. You just entered in your hierarchy, the first Alternative node with the name Model
A. Note that Alternative nodes are colored with orange, and they also have slightly different
graphic.
12. Repeat the previous step to insert the Alternative nodes Model B and Model C. Your tree
hierarchyshouldnowlookliketheoneinthefollowingcapture.
9 InternationalHellenicUniversity
ParaskevopoulosKonstantinos

TheAnalyticHierarchyProcess(AHP)

13. Click the button Next, located almost at the top of the window. It will open the interface for
thepairwisecomparisonsoftheCriterianodesasshowninthefollowingpicture.
ClicktheNextbuttontotakeyouin
step2ofthesolutionprocess.

14. Remember what Alexandros told you about his preferences and make the correct ratings as
showninthefollowingcapture:

Youcannoticethatwhilemakingtheselectionsforthepairwisecomparisons,twonumbersare
changingatthetopoftheselectiontool.ThosearetwoindicesnamedConsistencyIndexand
10 InternationalHellenicUniversity
ParaskevopoulosKonstantinos

TheAnalyticHierarchyProcess(AHP)
Consistency Ratio. We will talk about those two indices in the next exercise. Now keep in
mind that if those indices are colored red then you should rethink your ratings as they are
inconsistent.
15. When finished with the selections click on the Show Calculations button at the left of the
window.ThedialogAHPCalculationswillopenshowingtoyouallthecalculationsthatyoudid
inthefirstpartoftheexercisewhenthepairwisecomparisonsweremade.Checktoseeifyou
arecorrect!

16. Close the dialog AHP Calculations and click again on Next button. The necessary tools to
makethepairwisecomparisonsfortheAlternativenodesareshown.
17. Rate the Alternatives as you did in the first part of the exercise. When done with the ratings
yourscreenshouldlooklikethefollowingcapture:
11 InternationalHellenicUniversity
ParaskevopoulosKonstantinos

TheAnalyticHierarchyProcess(AHP)
InternationalHellenicUniversity
ParaskevopoulosKonstantinos

18. CheckthecalculationsifyouwantbyclickingonthebuttonShowCalculationsontheleftside
ofthewindow.
19. When done with the ratings of the
Alternatives click Next button once
more. Next step screen will show as
youcanseeinthefollowingcapture.
20. Here are the final rankings of the
Alternatives. Model A is the winner.
You can see also the score of each
Alternative in respect to its last
Criterion.
21. You can click also if you want at the
Show Graphs button and see
graphic representation of your
ratingsasshowninthepicture.
22. SavetheprobleminafilenamedExercise_2.xml.

12