Transportation

JOURNAL OF ADVANCED TRANSPORTATION
J. Adv. Transp. 2014; 48:974999

Published online 29 May 2013 in Wiley Online Library (wileyonlinelibrary.com). DOI: 10.1002/atr.1240
Analytic hierarchy process application in selecting the mode of

transport for a logistics company
Mesut Kumru1* and Pnar Yldz Kumru2

1
Dogus University, Kadkoy, stanbul, Turkey
2
Kocaeli University, zmit, Kocaeli, Turkey
SUMMARY
As a multi-criteria decision-making (MCDM) method, the analytic hierarchy process (AHP) has been
used considerably to solve hierarchical or network-based decision problems in socio-economic elds.
Following an in-depth explanation of the transport function in logistics and an overview of the MCDM
methods, the AHP model is employed in the paper for a logistics company in selecting the most suit-
able way of transportation between two given locations in Turkey. The criteria used in the selection of
transportation modes are identied as the cost, speed, safety, accessibility, reliability, environmental
friendliness, and exibility. Several cost parameters (transportation, storage, handling, bosphorus cross-
over) are incorporated into the decision-making process. The application is carried out in instructional
character. The results of the study indicate that the railway transportation, which is not widely used in
Turkey, is also an alternative and suitable means of transportation. Copyright 2013 John Wiley &
Sons, Ltd.
KEY WORDS: logistics; supply chain; mode of transport; multi-criteria decision-making; AHP
1. INTRODUCTION
In today's business world, the logistics activities are essential to satisfying the ever changing customer
demand in terms of variety and availability. Logistics costs account for nearly 30% of the sales dollar of
a company. Shifts in customer demand patterns, increasing pressure on companies to cut costs, the
globalization of several large corporations, and the emerging communication and information techniques
have created the need for cutting edge, sophisticated logistics practices. The globalization of economic
activity has forced major corporations to identify partners in other countries to manufacture components,
subassemblies, and in some cases, even the nal products. The selection is often on the basis of manufactur-
ing and logistics costs within and between countries. This phenomenon of global logistics has increased
the importance of logistics even further.
Being dened shortly as the art of managing materials, logistics is to provide the efcient
movement of supplies to the customers. The whole concept of logistics is based on seven Rs which
are the following: to move the right materials/products, in the right quantity, in the right condition,
at the right time, to the right place, at the right cost, and to the right customers/associates/suppliers/
stockholders. Logistics encompasses several functions such as vendor selection, transportation,
warehousing and facilities planning, and location. In addition, it is also impacted by production,
marketing, and product design decisions. Because logistics management involves several functions
of planning, procurement, transportation, supply, and maintenance of goods and services, there needs
close relations among these functions. Along with the objective to reduce costs and to enhance
customer satisfaction, the concept of logistics well ts into system denition. Logistics system directly
*Correspondence to: Mesut Kumru, Dogus University, Kadkoy, stanbul, Turkey. E-mail: mkumru@dogus.edu.tr
Copyright 2013 John Wiley & Sons, Ltd.

ANALYTIC HIERARCHY PROCESS APPLICATION IN SELECTING THE MODE OF TRANSPORT 975
affects the level of efciency and effectiveness in the process of transforming of raw materials into n-
ished products as well as into services rendered to customers. Here, distribution and transportation
function takes a major part in the system.
Because of many interrelated functions and interfaces, it is difcult to understand and measure
the true logistics costs and to design effective and efcient logistics systems. Moreover, the
requirements placed on logistics functions have been changing over the past several years. These
changing requirements may be grouped into the following three categories: competitive pressures,
deregulation of transportation industry, and information technology. In recent years, logistics has as-
sumed a vital role in satisfying the customer demand at the lowest possible cost. It became necessary
to combine organizational logistics with a strong focus on economic performance [1]. As a result,
several new concepts, methodologies, and decision support systems have come into existence to meet
the logistics challenges of the 21st century. Analytic hierarchy process (AHP) is one of these
methodologies that can be used easily as a decision support system tool in the logistics area of
multi-criteria decision-making (MCDM).
The purpose of this paper is to present the application of AHP to a transport mode selection
problem. The following objectives are threefold: (i) looking over the transportation function in
logistics; (ii) presenting general features and basic notions of MCDM methodology and the
AHP; and (iii) focusing on the step-by-step analysis of a typical real world case study of
transport mode selection by a logistics company in Turkey. The following sections were
organized in accordance with the order of those given objectives.
2. TRANSPORTATION FUNCTION IN LOGISTICS
Transportation takes a crucial part in the manipulation of logistics. It occupies more than one-third of
the amount in the logistics costs, and transportation systems inuence the performance of logistics
system hugely. Transporting is required in the whole production processes, from manufacturing to
delivery to the nal consumers and returns.
Value of transportation varies with different industries. For those products with small volume, low
weight and high value, transportation cost simply occupies a very small part of sale and is less
regarded; for those big, heavy and low-valued products, transportation occupies a very big part of sale
and affects prots more, and therefore, it is more regarded.
By means of well-handled transport system, goods could be sent to the right place at the right
time in order to satisfy customers' demands. It brings efcacy, and also it builds a bridge between
producers and consumers. Therefore, transportation is the base of efciency and economy in busi-
ness logistics and expands other functions of logistics system. In addition, a good transport system
performing in logistics activities brings benets not only to service quality but also to company
competitiveness.
Regarding the transportation function, the basic issue for any business/logistics rm is to decide
whether to outsource the transport service or use its own eet. If outsourcing is preferred, then the
selection of the most appropriate means of transport becomes a critical decision matter. The following
subsections discuss the subject from these points of view.
2.1. Selection criteria for transportation modes

The performance of a transportation mode inuences the effectiveness of the entire logistics function
of a company. The process of selecting the appropriate transportation mode is therefore an important
business decision, where a range of different service attributes offered by the transport supplier should
be evaluated.
In transportation functions, the main criteria to be taken into consideration are the following:
the cost, speed, safety, accessibility, reliability, environmental friendliness, and the exibility of
transportation. Transportation cost is the real payments made for the transportation between
two points and any extra expenditure to be borne related to this event. Site of the company
Copyright 2013 John Wiley & Sons, Ltd. J. Adv. Transp. 2014; 48:974999
DOI: 10.1002/atr
976 M. KUMRU AND P. Y. KUMRU
has also an impact on the transportation cost. The company has to assess alternatives either being
close to or far away from its customers and suppliers and reach the most appropriate solution.
Transportation speed is related to the means of transportation and denotes the time duration between
the two sites that materials are to be transported. Transportation safety, however, implies the arrival of
goods to the destination without any damage.
Accessibility is another criterion to be considered for the selection of transportation mode.
Accessibility to an area can be seen on the basis of time or costs for transport, which among
other things are decided by the localization of the cities, infrastructures and companies, as well
as mobility of people and goods. To determine the accessibility values of transportation modes,
a rate between the area of the country and the lengths of the transportation networks is calculated
to nd the accessibility coefcients.
Reliability (timeliness) feature of a transportation mode implies specically the extent to which the
mode can consistently meet promised delivery times for the shipper's consignments; It is the reliability
that the mode demonstrates in its ability to fulll service requirements. Hall and Wagner [2] have used
on time pick-up and delivery values for this criterion. Normally, reliability is to be assessed good for
highway and railway transportation modes [3].
Environmental friendliness (eco-friendliness) is concerned with commitments on tackling climate
change and reducing greenhouse gas emissions. Air quality, noise, waste, and so on, are considered
within this scope.
The exibility that a transportation mode exhibits is offering convenient schedules, allowing for
non-specic extras, pick-up, and delivery. It is accepted in general that highway transportation has
high exibility, whereas railway transportation has low exibility [3].
Selecting the most suitable mode of transportation for any need is of prime importance for the
logistics management and should be carefully executed.
2.2. Transportation modes

There are ve main transportation modes used in logistics. These are highway, railway, waterway,
pipeline, and airway. All have different advantages as well as disadvantages.
2.2.1. Highway transportation

Vehicles used on highways have their own power units to move their loads. Therefore, they can directly
carry and transport cargo to the receiving party. Because of its lower transit time, highway transportation
is advantageous compared with railway and waterway transportations. On the other hand, heavy trafc
and unfavorable weather conditions may result in different failures on vehicles, and consequent delays
may occur in transportation time, which means a loss in reliability with respect to the transit time. For a given
route, reliability of a carrier is directly related to its operative effectiveness and may change depending on its
assigned course. Because of their advanced suspension systems, the cost of packing used in highway
transportation is less than that of necessary for railway and waterway. In Turkey, the overall cost of highway
transportation is three times less than the cost of airway transportation, whereas 13 times more expensive
than that of sea transportation and six times more expensive than that of railway transportation.
2.2.2. Railway transportation

Compared with other transportation modes, this system has many advantages. Railway transportation
makes it possible to carry either liquid or dry cargo in bulk, frozen foodstuff, fresh vegetables and
fruits in temperature-controlled environments, and heavy hardware in different forms. The cost of long
distance railway transportation of low-valued, high-density goods is six times cheaper than that of
highway transportation and 18 times cheaper than that of airway transportation in Turkey. Prevailing
weather conditions are less hindering in railway transportation compared with other transportation
modes. One disadvantage of railway transportation is its limited accessibility. Because of its
dependability on existing railways, it is only possible to reach destinations where railways are
available. Additional transportation means are to be used to reach customers outside xed destinations.
Other disadvantage is its fairly long transportation time. Except seaway transportation, its speed is
slower than other transportation means.
DOI: 10.1002/atr
2.2.3. Waterway transportation

Seaway transportation is specically used for long-distance carriage of low-valued, high-volume
cargoes that can easily be loaded and unloaded. The biggest advantage of sea transport is its very
low cost. On the other hand, it is slower in speed, susceptible to weather and sea conditions, and
accessibility is limited to coastal zones.
2.2.4. Airway transportation

The biggest advantage of airway transportation is its high speed. The high transport cost on the other
hand is its main disadvantage. For airway carriers, the mean revenue per mile traveled is 18 times more
than that of railway and three times more than that of highway transportation.
2.2.5. Pipeline transportation

It is not an effective and practicable transportation mode except for transportation of crude oil and
natural gas. Its accessibility is limited. Carriers only directly located adjacent to the pipe line can
use this transportation mode.
2.2.6. Combined (multi-modal) transportation

Because of the different service characteristics and transportation costs, the logistics manager,
most of the time has to make use of different possible transportation modes available for a
specic route. For instance, in the case of the accessibility of airway transportation is limited;
he has to cooperate with highway carriers for collection and distribution activities. Thus, it will
be possible to benet from the advantages of airway transportation and to minimize the adverse
affects of it. Combined transportation modes contain both advantageous and disadvantageous
aspects of employed transportation modes. The decision of using a combined transportation mode
must be based on the effect of the transportation cost in the total logistics cost.
A comparison of transportation modes are given in Table I.
2.3. Fleet management

Fleet management is a critical component within the transportation function. The effective eet
management activities are composed of the following elements: planning, purchasing, maintenance,
safety, legal regulations related to environmental issues, and life of the vehicle. All these activities
are concerned with both cases; private eet ownership or outsourcing.
The choice to own and operate a private eet is based on very different concerns. The company's ap-
proach to cash management also will inuence the decision. Leasing provides a better use of the cash ow.
The tax benet of leasing to buying is such that lease payments are fully deductible as a business expense.
Purchasing vehicles, however, offers different tax advantages. In addition to the depreciation, the interest
payment on the loan can be deducted. It depends on the company's specic needs to determine whether
leasing or buying will provide the company with the best tax benet. For many contractors, the decision
to buy or lease may simply come down to what they feel is easier to manage [4].
Although some companies have or operate their own eets for transportation, others provide these
services from expert institutions within the concept of third-party logistics (3PL) and by doing so, they
Table I. Comparison of transportation modes (1 = the best, 5 = the worst).
Selection Transportation modes
Criteria Railway Highway Seaway Airway Pipeline

Cost 3 4 2 5 1
Transit time 3 2 4 1 -
Reliability 2 1 4 3 -
Power requirement 1 2 4 3 5
Accessibility 2 1 4 3 -
Product protection 3 2 4 1 -
DOI: 10.1002/atr
can only focus themselves to their main missions and avoid from complicated eet management task.
During the past 15 years economists have suggested that transaction costs are a major determinant as to
why and how outsourcing occurs.
Three basic objectives of outsourcing are as follows: improved service, reduced cost, increased
agility as to the core competency (of 3PL); leverage (economies of scale); globalization, technology,
shorter product lifecycle, infrastructure, labor, better information, shared risk, and government
compliance (customs brokerage, etc.) [5].
Outsourcing has several advantages: avoid vehicle expenditures, reduce labor cost, improved service,
low cost access to high technology, focus on core business, increased exibility, and simplify logistics
organization. It has also some disadvantages: can suffer from loss of control, could be more expensive,
could be time consuming to implement, some 3PLSs do a poor job [6]. Some authors have suggested that
logistics partnership relationships evolve over a continuum in the form of expanded outsourcing [7].
Although conducting their numerous responsibilities, eet management must be acutely aware of
the cost of business to their company and must do everything in their professional power to keep costs
down and prots high. Within this scope, vehicle assignment takes an important part, which needs to
use several optimization methods. Zak et al. [8], for example, used multi-objective combinatorial
optimization model in vehicle assignment problem.
3. MULTI-CRITERIA DECISION-MAKING: THE METHODOLOGY AND METHODS
Transport mode selection is an MCDM problem. MCDM refers to making decisions in the presence of
multiple, usually conicting, criteria and nding the best opinion from all of the feasible alternatives.
The origin of the MCDM is attributed to works that date of the mid of the last century [9].
Multi-criteria decision-making is a mature but still dynamically developing eld that aims at giving
the decision maker (DM) some tools in order to enable him/her to advance in solving a complex
decision problem, where severaloften contradictorypoints of view must be taken into account
[10]. Multiple criteria methods do not yield objectively best solutions due to its impossibility to
generate such solutions, which are the best from all points of view, simultaneously. In these
circumstances, a notion of a compromise solution [1012] that takes into account both the trade-offs
between criteria and the DM's preferences seems much more rational [13].
As to the stages of the solution procedure of the MCDM problems, Roy [14] distinguished four ma-
jor stages as follows: (i) denition of the set of alternatives (variants) and recognition of the category of
the decision problem; (ii) analysis of the parameters and construction of the consistent family of
criteria; (iii) modeling and aggregation of the DM preferences; and (iv) solving the decision problem
with an application of the global model of preferences.
An MCDM problem is a situation in which, having dened a set of alternatives and a consistent family
of criteria, the DM tends to determine the best subset of alternatives according to the criteria (choice
problem) or divide the alternatives set into subsets representing specic classes of alternatives according
to concrete classication rules (sorting problem) or rank the alternatives from the best to the worst, according
to the criteria (ranking problem) [10,15]. Zak [16,17] proved that choice and ranking problems constitute the
most important categories of the decision problems that arise in transportation companies and systems.
Researchers dened MCDM methods in different ways. For example, Xu and Yang [18] generalized
MCDM problems in two distinctive types due to the different problems settings: one type having an
innite number of solutions (multi-objective optimization problems), and the other one having a nite
number of solutions.(multi-attribute decision problems). Multi-objective decision-making consists of a
set of conicting goals that cannot simultaneously be achieved. It concentrates invariably on the
continuous decision spaces and can be solved by mathematical programming techniques.
Multi-attribute decision making (MADM) deals with the problem of choosing an option from a set
of alternatives, which are characterized in terms of their attributes. MADM is a qualitative approach
due to the existence of the criteria subjectivity. The DM may express or dene a ranking for the attri-
butes in terms of importance/weights. The aim of the MADM is to obtain the optimum alternative that
has the highest degree of satisfaction for all of the relevant attributes [19].
According to Hwang and Yoon [20], there are two types of MCDM methods. One is compensatory
and the other is non-compensatory. Non-compensatory methods do not permit tradeoffs between
DOI: 10.1002/atr
attributes. The MCDM methods in this category are credited for their simplicity (e.g., dominance
method, maxmin method, maxmax method, conjunctive constraint method, and disjunctive constraint
method [18]). These techniques may have their application domains in which they are reasonable, but
they may not be very useful for general decision-making. Compensatory methods permit tradeoffs
between attributes. A slight decline in one attribute is acceptable if it is compensated by some enhance-
ment in one or more other attributes. Compensatory methods can be classied into the following four
subgroups [20]: (i) Scoring methods, the alternative is selected according to its score or utility (e.g.,
simple additive weighting [18], AHP[21]). (ii) Compromising methods, the alternative that is closest
to the ideal solution is selected (e.g., Technique for Order of Preference by Similarity to Ideal Solution
(TOPSIS) [20]). (iii) Concordance methods, the concordance methods generate a preference ranking
that best satises a given concordance measure (e.g. The Linear Assignment Method [20]). (iv)
Evidential reasoning approach, the evidential reasoning (ER) approach is the latest development in
the MCDM area [22]. It uses an extended decision matrix, in which each attribute of an alternative
is described by a distributed assessment using a belief structure. The ER approach is the only method
so far capable of handling MCDM problems with uncertainties and hybrid nature [20].
The majority of specialists agree that MCDM methods can be divided into three groups as follows
[17]: (i) the methods of American inspiration, based on the utility function (aggregated criterion), that
eliminate incomparability between variants (e.g., AHP [21], UTilits Additives (UTA) [23]); (ii) the
methods of European (French) inspiration, based on the outranking relation that take into account
the incomparability between variants (e.g., ELimination Et Choix Traduisant la REalit (ELECTRE)
[24], preference ranking organization method for enrichment evaluation (PROMETHEE) [25],
Organisation, Rangement Et Synthse de donnes relaTionnelles (ORESTE) [26]); (iii) interactive
methods that are based on the trial and error approach in each iteration of the solution search proce-
dure (e.g., the method of Geoffrion, Dyer and Feinberg (GDF) [27], step method (STEM) [28], light
beam search (LBS) [29]). There are methods that do not fall into any of the aforementioned categories,
including multicriterion analysis of preferences by means of pairwise actions and criterion compari-
sons (MAPPAC) [30], which is designed as a methodological combination of multi-attribute utility
theorymulti-attribute utility theory (MAUT) [31] and outranking theory OT [32]. A comprehensive
overview of MCDM techniques was made by Figueira [33].
According to Meza [34], the most commonly used MADM methods include utility function method
[35,36], tradeoff analysis method [37], TOPSIS, ELECTRE, PROMETHEE, and AHP.
Zak [13] further classied the MCDM methods according to the moment of the denition of the DM's
preferences [38] and the manner of the preference aggregation [10,14]. With respect to the rst division
criterion, the following three categories of methods are identied: (i) methods with an a priori dened pref-
erences (e.g., ELECTRE methods [24], PROMETHEE I and II [25], UTA [23], MAPPAC [30], ORESTE
[26]); (ii) methods with an a posteriori dened preferences (e.g., pareto simulated annealing (PSA) method
[39]); and (iii) interactive methods (e.g., GDF [27], surrogate worth trade-off (SWT) [40], Steuer Procedure
[41], STEM [28], Visual Interactive Goal Programming (VIG) [42], Light Beam Search (LBS) [29]).
There are many MCDM methods in use today. However, often, different methods may yield
different results for exactly the same problem. The choice of which model is most appropriate depends
on the problem at hand and may be to some extent dependent on which model the DM is most
comfortable with. The most commonly used MCDM methods are TOPSIS [20], ELECTRE [24],
PROMETHEE [43], Measuring Attractiveness by a Categorical Based Evaluation Technique
(MACBETH) [44], and AHP [21,45].
With regard to the comparison of those common methods, Santana [46] has conducted a comparative
study on the methods AHP, ELECTRE, and TOPSIS and considered that by the fact that AHP assures
the consistency analysis of the judgments, AHP means, a priori, more robust than the other two. The
TOPSIS was considered the simpler of the studied methods. Zanakis et al. [47] performed comparisons
on AHP, ELECTRE, TOPSIS and two more methods, using simulated data. The results obtained by the
AHP and TOPSIS methods showed some similarity. But the results from TOPSIS and ELECTRE presented
signicant divergence. Focusing on the analysis that was based on the opinions of DMs and stakeholders
who applied the methods (ELECTRE, AHP, UTA, ORESTE, and MAPPAC) in the decision-making pro-
cess, Zak [17] draws the following conclusions: (i) the methods have universal character and can be applied
with satisfactory computational efciency to multi-objective ranking problems; (ii) ELECTRE and AHP
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methods are the most reliable and users' friendly MCDM methods; their preference proposals and nal rank-
ings are highly appreciated; and (iii) UTA method is recommended for decision problems with a larger num-
ber of variants, whereas ELECTRE, ORESTE, and MAPPAC methods should be applied to smaller
instances; AHP method can be applied in both cases.
None of the works presented in the previous section has concluded that AHP is an inferior MCDM
method. By the opposite, the results obtained for the different methods, in the most of cases, may be
considered similar. Several advantages of the application of the AHP have been observed in all cases.
From the experience of the studied cases, if there will be time to take the decision, if there will be no
more than nine alternatives, and if these alternatives and the criteria of decision were total independent,
Salomon [48] suggested the use of the AHP, expecting the attainment of good results: an excellent, or
maybe, the optimum solution.
In spite of AHP method's popularity, this method is often criticized because of its inability in
handling the uncertain and imprecise decision-making problems [49]. Watson and Freeling [50,51],
Belton and Gear [52], Dyer [53,54] have criticized AHP because this aggregation method suffers rank
reversal (an alternative chosen as the best out of a set X, fails to be chosen when another, perhaps
unimportant, alternative is excluded from X) and needs interval scales for the evaluation of local
priorities on each criterion (not affected by the exclusion of any alternative).
In the light of the aforementioned considerations, the AHP method was preferred to be used in our
case and discussed in Section 5.
4. LITERATURE REVIEW
Multi-criteria decision-making applications in transportation and AHP applications in particular, were

searched in the literature. Several successful applications of multiple criteria analysis in urban
transportation planning have been reported [5559]. Different MCDM tools were applied to analyze
and optimize public transportation. Ergun et al. [60] carried out a comprehensive multiple criteria
assessment of transportation alternatives for Istanbul metropolitan area. Sawicki et al. [61] compared
the results of the transportation system assessment by three different multiple criteria decision-aiding
methods: ELECTRE, ORESTE, and MAPPAC. ELECTRE method was also used for the multiple
criteria evaluation and selection of the transportation means for the mass transit system [62]. Zak
[13] presents in his individual and co-authored works [17], [6367] the application of fuzzy linear in-
teger programming [68,69] and LBS [29] methods to multiple objective optimization of the mass tran-
sit system based on buses and trams. In other works [70,71], a multiple objective hybrid evolutionary
metaheuristic procedure, called Pareto Memetic Algorithm is applied to solve complex multiple objec-
tive optimization problems in passengers' transportation systems such as crew scheduling and vehicle
assignment. zkan and Balgil [72] applied in their study the method TOPSIS to choose the best
alternative transportation mode for each of the sectors food, textile, electronic, logistics, metal
working, and chemistry. Zak [13] presented a methodological overview of the application of MCDM
in public transportation and demonstrated by two case studies the possible applications of MCDM. The
author used ELECTRE III method in multiple objective evaluation of the mass transit system
developments' scenarios and formulated a multiple objective mathematical programming problem
and solved it by a combination of an original, customized heuristic procedure implemented in a
computer software and the LBS method in optimizing the crew size in the mass transit system operated
by a public transportation company. In his work, Zak [13] arrived at a decision that the
MCDM/methodology seems to be a useful tool for the analysis, evaluation, and optimization of the
mass transit systems. This methodology enables the DM to take into account several, often contradic-
tory, points of view and assures that the most satisfactory, compromise solution is nally selected
Regarding the AHP applications, Sipahi and Timor [73] selected and referenced in their paper a total
of 232 application articles published in highly reputed international academic journals among more
than 600 related papers published in the period 20052009. The ndings show that during the years
20052009, use of the AHP technique has continued to increase exponentially. Applications of
AHP have been dominant in manufacturing, followed by the environmental management and
agriculture eld, power, and energy industry, transportation industry, construction industry, and
healthcare. To illustrate the different uses of AHP, Saaty [74] applied ve examples of the method
DOI: 10.1002/atr
in transportation (commuter route selection, mix of routes selection to international airport, choosing a
best mode to cross a river and choosing a car for a transport system). Gercek et al. [75] applied AHP to
evaluate different rail transit projects for the European side of Istanbul. Hsu [76] worked on a fuzzy
delphi AHP to evaluate the mass transit system in Kaohsiung. Piantanakulchai and Saengkhao [77]
applied AHP to transport decision-making and modeled the related social interest groups in the
decision process to reect social preference. The paper of Pogarcic et al. [78] analyzed possibilities
of applying AHP method in making decisions regarding planning and implementation of plans in traf-
c and ensuring the qualitative business logistics. A case study examining the different modes for
transportation of freight by a Turkish logistics service provider company was presented by Tuzkaya
and nt [79]. To cope with ambiguity and vagueness problem, the authors have used the fuzzy ana-
lytic network process method and considered many incommensurable, nonlinear, even conicting
criteria simultaneously. The theoretical basis for feed forward articial neural network (FANN) to
solve a transport mode selection problem was presented by Qu et al. [80]. The authors proposed an
adaptive ANN system in which the number of ANN input nodes adapts the DMs' preference threshold,
and the initial input weights are determined by fuzzy AHP. Empirical results evidently showed that this
MCDM method is an accurate, exible, and efcient transport mode selection model. In their work,
Hanaoka and Kunadhamraks [81] studied fuzzy AHP to assess operators' perception of the intermodal
freight transportation performance via proper assignment of numerical scores. Chung et al. [82] uti-
lized the grey statistical method with survey techniques and the AHP to develop an integrated evalu-
ation model for solving the technology-sourcing problem in advanced public transport systems. Tor
and Farahani. [83] applied fuzzy AHP to determine the relative weights of evaluation criteria and fuzzy
TOPSIS to rank the alternatives.
Apart from these works, AHP is applied in this paper with a wide range of selection criteria and
incorporation of several different cost parameters, and it is presented in an instructional character,
which will overall add value to the practice of transportation.
5. ANALYTIC HIERARCHY PROCESS: A DECISION SUPPORT SYSTEM TOOL
Analytic hierarchy process was developed by Thomas Saaty in 1980 [21] as a method of solving
socio-economic decision-making problems. It has been the most appropriate multi-criteria
decision technique for solving complicated cases [84] and has been used to solve a wide range
of decision-making problems [8596]. The AHP has been applied to numerous problem situa-
tions; selecting among competing alternatives in a multi-objective environment, the allocation
of scarce resources, and forecasting. Although it has wide applicability, the axiomatic foundation
of the AHP carefully delimits the scope of the problem environment [97]. It is based on the well-
dened mathematical structure of consistent matrices and their associated right-eigenvector's abil-
ity to generate true or approximate weights [21,98].
When making a multiple objective decision, the basic problem is the consideration of lots of
criteria for alternatives to be assessed and the denition of importance, weights, and superiorities.
AHP is a method to establish these kinds of preferences in a hierarchical structure. Once the problem
is dened and converted into a hierarchical form, relative importance of each criterion with respect
to others is calculated. DM performs pairwise comparisons of each element in corresponding level
with respect to an element in the upper level in order to dene the relative importance. Afterwards,
on the basis of these results, pairwise comparisons and matrices are formed. In fact, it is almost
impossible to reach a perfect consistency during these kinds of pairwise comparisons. While
assessing the effectiveness of a decision model, it must be investigated how bad the inconsistency
of the decision is with respect to the related problem. AHP requires that consistency in thinking
and judgment has to be maintained, but to some extent, this consistency can be violated between
preferences when prioritizing. The degree of inconsistency in pairwise judgments is measured by
the inconsistency index (see the next section). Perfect consistency implies a value of 0 for the index.
Numerical value for this index (level of inconsistency) is not to be more than 0.1 for pairwise
comparison matrices for an established hierarchical model.
DOI: 10.1002/atr
5.1. The methodology of analytic hierarchy process

Analytic hierarchy process decomposes a problem into several levels in such a way that they form a
hierarchy. For each problem, it uses this hierarchical model that is made up of the goal, criteria, and
alternatives. It is a general procedure for complicated, hard to visualize, or unstructured problems
and founded on three basic principles.
(1) Establishing the hierarchies
(2) Dening the superiorities
(3) Having logical and numerical consistencies
All elements of hierarchy are related to each other and it can easily be seen that a change in one
factor affects others. This exibility within the hierarchical structure of AHP is a great help for the
DM. Structuring the decisions within this composition, different types of data can be combined,
differences in their performance levels can be aligned, and objects different in nature can be compared
to each other. A simple AHP model is shown in Figure 1.
The application of the AHP method is realized through the following four stages [22,89].
(1) Decomposition. A complex decision problem is decomposed into a hierarchy with each level
consisting of a few manageable elements; each element is then further decomposed and so on.
(2) Prioritization. It involves pairwise comparisons of various elements residing at the same level
with respect to an element from the upper level of the hierarchy.
(3) Synthesis. The priorities are pulled together through the principle of hierarchic composition to
provide the overall assessment of the available alternatives.
(4) Sensitivity analysis. The stability of the outcome is determined by testing the best choice against
what-if type of change in the priorities of the criteria.
Prioritization stage is carried out using a series of standard AHP forms and tables. An example of a
pairwise comparison matrix is demonstrated in Table II for a case of three alternatives with one
criterion. As a further stage, a normalized matrix is derived from pairwise comparison matrix, and
then, a priority vector is calculated that gives the relative priority weights of alternatives. Following
in the same manner, an overall assessment is provided.
The AHP uses an absolute value scale ranging from 1 to 9 for making the pairwise comparison
judgments. The scale is explained in Table III.
The AHP also employs a consistency ratio (CR) measure to check the consistency of judgment.
Inconsistency is likely to occur when DMs make careless errors or exaggerated judgment during the
process of pairwise comparisons. A CR of 0.1 is considered as an acceptable upper limit. If CR is
Figure 1. Summary of two-level hierarchy for selecting an alternative.
Table II. Example of three alternative (AI, A2, A3) pairwise comparison matrices for criterion C.
C A1 A2 A3 Priority vector
A1 1 A1/A2 A1/A3 %
A2 A2/A1 1 A2/A3 %
A3 A3/A1 A3/A2 1 %
DOI: 10.1002/atr
Table III. The analytic hierarchy process comparison scale.
Absolute value Denition

1 Equal importance
3 Moderate importance of one over another
5 Strong or essential importance of one over another
7 Very strong or demonstrated importance of one over another
9 Extreme importance of one over another
2,4,6,8 Intermediate values
Reciprocals Reciprocals for inverse comparison
found to be greater than 0.1, the DMs need to re-evaluate their judgments in the pairwise comparison
matrix until an acceptable ratio (<0.1) is nally achieved.
A consistency index (CI) number is used as a measure of consistency in attaining the CR value. CI is
the deviation or degree of consistency computed by using the following formula,
max n
CI
n1
where max is the principle (largest) Eigenvalue obtained from the summation of products between
each element of Eigenvector and the sum of columns of the reciprocal matrix, and n is the number
of comparisons. CI is used in comparing it with the appropriate one. The appropriate CI is called
random consistency index (RI). The average RI of sample size 500 matrices is shown in Table IV.
Consistency ratio is a comparison between CI and RI, or in formula
CI
CR
RI
If CR 0.10, the inconsistency is acceptable, otherwise, the subjective judgment is to be revised.
5.2. The benets of analytic hierarchy process

Analytic hierarchy process is a comprehensive framework, which is designed to cope with the
intuitive, rational, and irrational when multi-objective, multi-criterion, and multi-actor decisions are
made, with or without certainty, for any number of alternatives. The basic assumption of AHP is the
condition of functional independence of the upper part, or cluster of the hierarchy, from all its lower
parts, and from the criteria or items in each level [83].
Analytic hierarchy process is a powerful and easy to understand scientic procedure that gives
individuals and groups the possibility of combining qualitative and quantitative characteristics in the
decision-making process [99]. The reason of adopting AHP especially for the qualitative performance
data is the fact that qualitative factors are often complicated and conict. Also, the user acceptability
and condence in the analysis provided by the AHP methodology is high when it is compared with
other multi-attribute decision approaches [100]. The other benets of AHP include the following:
providing a systematic way for subjective decision processes, serving sensitivity analysis, giving
information about the evaluation criteria's implicit weights, and providing better understanding and
Table IV. Random consistency index values for n from 1 to 10.
n 1 2 3 4 5 6 7 8 9 10
RI 0 0 0.58 0.90 1.12 1.24 1.32 1.41 1.45 1.49
Source: http://people.revoledu.com/kardi/tutorial/AHP/Consistency.htm, viewed 25.11.2009.
RI, random consistency index.
DOI: 10.1002/atr
participation among the members of the decision-making group and hence a commitment to the chosen
alternative [101].
The AHP model is to be employed for a logistics company in selecting the most suitable way of
transportation between two given locations in Turkey.
6. BUSINESS APPLICATION
6.1. General
A&C EXPRES is one of the leading logistics companies of Turkey in highway transportation and
possesses a big storage capacity. Its operation center is situated in Istanbul, at the intersection of Asia
and Europe, where highway, railway, and airway networks meet. A&C EXPRES provides 3PL
services by its own transportation eet. These services are summarized as follows:
Complete transportation, partial transportation and distribution.
Micro distribution within cities.
Material transportation from belt to belt.
In country transportation of heavy materials.
Company transportation.
The company CONSAN produces different types of construction materials and plans to get ready to ex-
port its products in the near future. The products will be transported from the company storage site situated
in orlu, nearby Istanbul, to another storage site situated in Mersin, and from there, they will be exported to
different destinations by the seaway. Transportation from orlu to Mersin will be borne by A&C EXPRES.
There are three alternative means of transportation from Corlu to Mersin. These are highway
transportation, railway transportation, and combined (highway + railway) transportation. These three
alternative transportation routes are depicted in Figure 2.
6.2. Problem denition

In this study, with the deployment of AHP methodology, an MCDM problem is to be solved. The
decision problem consists of the selection of the most suitable way of transportation mode from among
the three alternatives between orlu and Mersin. A wide range of selection criteria needs to be used
during the evaluations. The cost, speed, safety, accessibility, reliability, environmental friendliness,
and the exibility are deemed important criteria to be considered in the selection process. Because
of the characteristics of the freight and the modes of transportation, several different cost parameters
(transportation, storage, handling, and bosphorus crossover) are incorporated into the decision-making
process. The expectations and requirements of different groups of stakeholders (customer, logistics op-
erator, environmentalist, civilian, government, etc.) are taken into account by considering the
Figure 2. Alternative transportation routes depicted on the map of western Turkey.
DOI: 10.1002/atr
economical and social aspects of the problem. The DMs make their nal decision based on the
available parameters and arrive at a solution that will satisfy all the bodies concerned. The decision
process is carried out in an instructional character. All of the aforementioned features make this study
original and contribute in a certain way to the practice of transportation.
6.3. Cost analyses of transportation modes

For each mode of transportation, detailed cost analyses were carried out separately and given in the
following sections.
6.3.1. Highway transportation

At present, it is the most common and extensively used transportation type. A&C EXPRES has
expertise in this eld of transportation. The materials will be taken from the storage space of CONSAN
in orlu and transported to Mersin port.
The highway transportation cost calculations are based on the following parameters:
Capacity of a vehicle 15 tons
Amount of weekly delivery 300 tons
Number of vehicles per week 300/15 = 20
Distance from orlu to Mersin port 1063 km
Fuel price Turkish Liras (TL) 2.01/l
Fare for crossing the bosphorus bridge TL 21
Transportation coefcient Average percent of 1 l fuel consumed per kilometer: 0.66.
Normally, new model trucks with 2040 ton of capacity consume fuel at an average of 26%
of l/km [102]. Although determining the transportation coefcient in the study, consumption
rate was taken as 2.5 times of the average (0.66) due to the cost components of vehicle
operating cost, time cost, and accident cost. However, no congestion factor was used directly;
it was assumed that it is included implicitly in the time cost.
The total weekly transportation cost is determined on the assumption that the materials will be
carried from orlu to Mersin port and they will be put in a storage space as they arrive at the
destination until the total amount is transported. Thus, the weekly transportation cost is the number
of vehicles per week multiplied by the transportation cost per vehicle, which is the product of the
distance traveled, fuel price per liter, and transportation coefcient plus a fare for crossing the bospho-
rus bridge, such that the total weekly transportation cost = 20*(1063 * 2.01*0.66 + 21) = TL 28623.5.
The storage cost per ton of material at Mersin port is given to be TL 0.5. On the basis of this value,
calculation of the weekly storage cost is summarized in Table V.
From the statistical information, it is understood that 40% of the vehicles cannot be directed to other
destinations and return without load. Therefore, the cost of return trip has taken 40% of the cost of the
trip from orlu to Mersin. Then,
Cost of the return trip empty 28623:5*0:40 TL 11449:2:
Hence, the total weekly cost of highway transportation is computed as the summation of
transportation, return and storage costs. This brings us the following amount.
Total weekly cost of highway transportation 28623:5 11 449:2 555 TL 40627:7
Table V. Storage cost at Mersin port.
First day Second day Third day Fourth day Fifth day Sixth day Total
Number of vehicles 4 4 3 3 3 3 20
Amount of material transferred (tons) 60 60 45 45 45 45 300
Total amount of material stored (tons) 60 120 165 210 255 300 -
Storage cost (TL) 30 60 82.5 105 127.5 150 555
DOI: 10.1002/atr
6.3.2. Railway transportation

Although the railway transportation is cheaper than the airway and highway transportations, it is not
widely used by transportation companies. In this part of the study, the railway transportation is
assessed considering the fact that the nature of the materials is durable and not easily breakable, and
the total transportation time has considerable tolerances.
Because A&C EXPRES does not have former experience with railway transportation, all the cost
calculations are executed on the information gathered from the web site of TCDD (Turkish Republic
Railway Transportation Agency; http://tcdd.gov.tr, 08.01.2009). The cost calculations of the railway
transportation are based according to the following schemes:
(1) The materials will be taken from the storage site of CONSAN, transported to the storage area at
orlu railway station, and then loaded onto the train.
(2) Upon arrival of the materials at Sirkeci railway station, the wagon will be transferred by ferry to
Haydarpaa railway station.
(3) From Haydarpaa railway station, the materials will be transported to Mersin railway
station by railway.
(4) After 1 day waiting time in Mersin railway station, the materials will be unloaded into
Mersin Port.
6.3.2.1 Transportation cost of the materials from CONSAN premises to Corlu. We use the
formerly given parameters excluding the bosphorus bridge crossing fare for this part of highway
transportation.
Capacity of a vehicle 15 tons
Amount of weekly delivery 300 tons
Number of vehicles per week 300/15 = 20
Distance from CONSAN to orlu 15 km
Fuel price TL 2.01/l
Transportation coefcient Average percent of 1 l fuel consumed per kilometer: 0.66.
The weekly transportation cost is found to be TL 398, which is the result of 20*(15*2.01*0.66).
The storage cost per ton of material at orlu railway station is given as TL 0.75. This brings out a
total storage cost of TL 225 as the outcome of 300*0.75. Then, the total weekly transportation cost
from CONSAN to orlu is 398 + 225 = TL 623.
6.3.2.2 Transportation cost from orlu to Mersin railway station (TCDD tariff is used). This part of
the railway transportation is based on the following parameters.
Amount of delivery 300 tons
Railway transportation cost TL 43.21 per ton
Ferry boat fare TL 6.8 per ton (from Sirkeci to Haydarpaa,
across the bosphorus)
Value of transported goods TL 210000
Value premium (added to xed transportation cost) 0.2% of value of transported
goods = 0.002*210000 = TL 420.
The railway transportation cost from orlu to Mersin station is simply calculated by adding the
associated gures of transportation, ferry, and value premium costs, so that Railway transportation
cost = 300*43.21 + 300*6.8 + 420 = 12963 + 2040 + 420 = TL 15423.
Because the storage and unloading cost in Mersin railway station is TL 1 per ton, waiting for 1 day
in Mersin railway station and the material unloading cost is TL 300.
The cost of transferring the goods from Mersin railway station to the storage area in Mersin port is
calculated regarding the highway transportation principle.
Transportation to storage area in Mersin port = number of vehicles per week*(distance traveled*fuel
price per liter*transportation coefcient) = 20*(10*2.01*0.66) = TL 265.
By the same logic, the cost of the return trip (empty) is assumed to be 50% of the transportation cost
from Haydarpaa to Mersin, which results in 12963 *0.50 = TL 6481.5.
DOI: 10.1002/atr
The transportation cost from Mersin railway station to Mersin port is in total
300 + 265 + 6481.5 = TL 7046.5. Hence,
Total weekly cost of railway transportation 623 15423 7046:5 TL 23092:5:
6.3.3. Combined transportation

This transportation mode aims at the concurrent utilization of both the highway and railway. The
scheme is explained as follows.
1. Transportation of the materials from CONSAN premises in Corlu to Haydarpaa railway station.
2. Storage of the materials at Haydarpaa railway station and loading onto the train.
3. Railway transportation from Haydarpasa to Mersin railway station.
4. One day waiting time in Mersin railway station and unloading of the materials into Mersin Port.
6.3.3.1 Transportation cost of the materials from orlu to Haydarpaa railway station. Given the
same highway parameters and the distance from orlu to Haydarpaa, which is 140 km, the weekly
transportation cost is calculated as follows.
Weekly transportation cost = number of vehicles per week*(distance traveled*fuel price per
liter*transportation coefcient + fare for the bosphorus bridge) = 20*(140*2.01 *0.66 + 21) = TL 4134.5.
6.3.3.2 Storage cost at Haydarpaa railway station. Because the storage cost of materials per
ton is TL 0.75 at Haydarpaa railway station, the weekly storage cost is summarized in
Table VI.
6.3.3.3 Transportation cost of the materials from Haydarpasa to Mersin railway station (TCDD tar-
iff is used). Here, TL 38.31 is given as the unit weight (ton) cost of materials transportation for this
route. Other parameters and the cost calculation scheme are the same. The cost of the return trip
(empty) is 50% of the transportation cost from Havdarpasa to Mersin.
Weeklytransportationcost = weightofthematerials(ton)*unitweightcost + costofthereturntrip(empty) +
valuepremium = 300*38.31 + (300*38.31)*0.50 + 0.002*210000 = 11493 + 5746.5 + 420 = TL17659.5.
6.3.3.4 Waiting for one day in Mersin railway station and unloading of the materials.
With the previously given parameters, the storage and unloading cost in Mersin railway
station is TL 300 TL (300*1), and the cost of transportation to storage area in Mersin port
is TL 265 = (20*10*2.01*0.66).
Weekly handling cost = 300 + 265 = TL 565.
Total weekly cost of combined transportation 4134:5 562:5 17659:5 565 TL 22921:5:
6.4. Relative costs

The transportation costs calculated up to now for different modes and the relative cost gures calcu-
lated thereon are summarized in Table VII.
Assigning weights to the transportation costs, let
TCH The cost of highway transportation
TCR The cost of railway transportation
TCC The cost of combined transportation
Table VI. Storage cost at Haydarpaa railway station.
First day Second day Third day Fourth day Total

Number of vehicles 5 5 5 5 20
Total amount of materials stored (tons) 75 150 225 300 -
Storage cost (TL) 56.25 112.5 168.75 225 562.5
DOI: 10.1002/atr
Table VII. Transportation costs per mode and relative costs thereof.
Relative cost
Cost
Mode of transportation (TL) Highway Railway Combined
Highway transportation 40628 1 0.568 0.564
Railway transportation 23093 1.759 1 0.993
Combined transportation 22922 1.772 1.007 1
Table VIII. Pairwise comparison matrix for cost.
Cost TCH TCR TCC

TCH 1.000 0.568 0.564
TCR 1.759 1.000 0.993
TCC 1.772 1.007 1.000
TCH, the cost of highway transportation; TCR, the cost of railway transportation; TCC, the cost of combined transportation.
The pairwise comparison matrix (reciprocal matrix) for the transportation costs is generated in
Table VIII.
Summing of column entries and dividing each entry to the sum of each column, the following
normalized matrix (normalized relative weight matrix) is obtained for the transportation costs. Total
weights of each column add up to 1. The average value of each row in normalized matrix represents
the relevant cost weights of the transportation modes. These weights are called priority vector
(normalized principle Eigenvector). The sum of all elements in priority vector is also 1 (Table IX).
6.5. Relative speeds

The transportation speeds are determined in accordance with the rules and regulations imposed by the
governmental agencies. Average speeds [103] are given in Table X.
The combined transportation speed is the average speed of the highway and railway speeds
weighted with respect to the distances corresponding to the type of transportation.
60 140 35 1136
38km=h
140 1136
Assigning weights to the transportation speeds, let

TSH The speed of highway transportation
TSR The speed of railway transportation
TSC The speed of combined transportation
The pairwise comparison and normalized matrices for the transportation speeds are obtained like-
wise. The average value of each row in normalized matrix represents the relevant speed weights of
the transportation modes. Thus, the priority vector for speeds involves the following weights
(Table XI).
Table IX. Normalized matrix for cost.
Cost TCH TCR TCC Priority vector

TCH 0.221 0.221 0.221 0.221
TCR 0.388 0.388 0.388 0.388
TCC 0.391 0.391 0.391 0.391
TCH, the cost of highway transportation; TCR, the cost of railway transportation; TCC, the cost of combined transportation.
DOI: 10.1002/atr
Table X. Transportation speeds and their relative equivalents.
Mode of transportation Speed of transportation (km/h) Relative speed

Highway Railway Combined
Combined transportation 38(*) 1.579 0.921 1
Table XI. Pairwise comparison matrix for speed.
Speed TSH TSR TSC Priority vector

TSH 1.000 1.714 1.579 0.451
TSR 0.583 1.000 0.921 0.263
TSC 0.633 1.086 1.000 0.286
TSH, the speed of highway transportation; TSR, the speed of railway transportation; TSC, the speed of combined transportation.
6.6. Relative safeties

In the selection of transportation mode, the safety factor is also taken into consideration in order that
the materials reach the destination without damage. For each mode of transportation, existing statistical
data in terms of accident/ton per kilometer [103] is used in determining the factor of safety and sum-
marized in the succeeding text with their relative conversions (Table XII).
Recalling the highway and railway distances corresponding to the mode of transportation and taking
the weighted average, the combined transportation accident rate is found to be
30 140 9 1136
12accident=ton*km
140 1136
Assigning weights to the transportation safeties, let

TSfH The safety of highway transportation
TSfR The safety of railway transportation
TSfC The safety of combined transportation
The pairwise comparison and normalized matrices for the transportation safeties are obtained
likewise. The average value of each row in normalized matrix represents the relevant safety weights
of the transportation modes. Thus, the priority vector for safeties involves the following weights
(Table XIII).
6.7. Relative accessibilities

Highway transportation reaches almost every settlement in Turkey, whereas railway transportation
connects only 37 cities among 81 cities spread over the land [104]. This corresponds to an accessibility
rate of 37/81 = 0.457. Accessibility rate for the combined transportation was calculated according to
Table XII. Accident rates and their relative equivalents.
Mode of transportation Accident rates (accident/ton*km) Relative safety
Highway Railway Combined

Combined transportation 12(*) 2.5 0.75 1
DOI: 10.1002/atr
Table XIII. Pairwise comparison matrix for safety.
Safety TSfH TSfR TSfC Priority vector

TSfH 1.000 0.300 0.400 0.146
TSfR 3.333 1.000 1.333 0.488
TSfC 2.500 0.750 1.000 0.366
TSfH, the safety of highway transportation; TSfR, the safety of railway transportation; TSfC, the safety of combined transportation.
the share of highway in that mode, such that
1140 0:4571136
0:517
140 1136
Assigning weights to the transportation accessibilities ,let

TAH The accessibility of highway transportation
TAR The accessibility of railway transportation
TAC The accessibility of combined transportation
The pairwise comparison and normalized matrices for the transportation safeties are obtained
likewise by using the accessibility coefcients of TAH (1.000), TAR (0.457), and TAC (0.517). The
average value of each row in normalized matrix represents the relevant accessibility weights of the
transportation modes. Thus, the priority vector for accessibilities involves the following weights
(Table XIV).
6.8. Relative reliabilities

In Turkey, railway transportation is less reliable than highway transportation. If we accept the expected
time of arrival to be the most appealing measure of reliability for freight transportation, a rate of
0.891timeliness occurs in railway passenger transportation in Turkey (BTS Union Report, 2009). It
is most probably less than that amount for the railway freight transportation. For combined
transportation, again, it was calculated according to the share of highway in that mode, such that
1140 0:8911136
0:903
140 1136
Assigning weights to the transportation reliabilities, let

TRH The reliability of highway transportation
TRR The reliability of railway transportation
TRC The reliability of combined transportation
The pairwise comparison and normalized matrices for the transportation reliabilities are obtained
likewise by using the reliability coefcients of the reliability of highway transportation (TRH)
(1.000), the reliability of railway transportation (TRR) (0.891) and the reliability of combined
Table XIV. Pairwise comparison matrix for accessibility.
Accessibility TAH TAR TAC Priority vector

TAH 1.000 2.188 1.934 0.507
TAR 0.457 1.000 0.884 0.231
TAC 0.517 1.131 1.000 0.262
TAH, the accessibility of highway transportation; TAR, the accessibility of railway transportation; TAC, the accessibility of
combined transportation.
DOI: 10.1002/atr
transportation (TRC) (0.903). The average value of each row in normalized matrix represents the rel-
evant reliability weights of the transportation modes. Thus, the priority vector for reliabilities involves
the following weights (Table XV).
6.9. Relative eco-friendliness

With regard to noise, CO2 emission, and effects on open land and wild life, the demerits of highway
and railway transportations in Turkey are 204 and 150, respectively [105]. Also, within the European
Environment Agency countries-32, the transport sector is clearly the dominant source of ozone
precursor pollutants (CO, NOX, NMVOC (non-methane volatile organic compounds)), and the
combined, emissions of ozone precursor pollutants from road transport and non-road transport
contribute 84% and 11%, respectively [106]. By adding these gures to demerits of highway and
railway transportations in Turkey, we obtain 288 and 161, respectively, in total, Eco-friendliness
demerit rate for combined transportation was calculated according to the share of highway in that
mode, such that
288140 1611136
174:93
140 1136
Assigning weights to the transportation eco-friendliness, let

TEH The eco-friendliness of highway transportation
TER The eco-friendliness of railway transportation
TEC The eco-friendliness of combined transportation
The pairwise comparison and normalized matrices for the transportation eco-friendliness are
obtained likewise by using the eco-friendliness coefcients of TEH (1.000), TER (0.559), and TEC
(0.608). The average value of each row in normalized matrix represents the relevant eco-friendliness
weights of the transportation modes. Thus, the priority vector for eco-friendliness involves the
following weights (Table XVI).
6.10. Relative exibilities

In Turkey, Turkish railways are offering several operational exibilities (mechanism) that aim to attract
more the attention of freight customers. These are establishing 12 logistics centers (including loading
unloading and storage facilities) in the country starting from the year of 2010, block train transportation,
permission for private wagon ownership, and exible time tables (schedules). By this policy, railway
transportation tries to enhance its exibility level. On the other hand, highway transportation has a high
operational exibility as vehicles can serve several purposes but are rarely able to move outside roads.
Flexibilities concerning eet, vehicle, node, capacity, routing, communication, product/product mix,
volume, delivery, and access were equally weighted and then scored over 100. On the basis of the
discussions with logistics rm managers, it was agreed to determine the exibility level as 1 for highway
and 0.40 for railway. The rate for combined transportation was calculated with respect to the proportion
of highway and railway distances, such that
1140 0:401136
0:466
140 1136
Table XV. Pairwise comparison matrix for reliability.
Reliability TRH TRR TRC Priority vector

TRH 1.000 1.122 1.107 0.358
TRR 0.891 1.000 0.987 0.319
TRC 0.903 1.013 1.000 0.323
DOI: 10.1002/atr
Table XVI. Pairwise comparison matrix for eco-friendliness.
Eco-friendliness TEH TER TEC Priority vector

TEH 1.000 0.559 0.608 0.226
TER 1.789 1.000 1.088 0.403
TEC 1.645 0.919 1.000 0.371
TEH, the eco-friendliness of highway transportation; TER, the eco-friendliness of railway transportation; TEC, the eco-friendliness of
combined transportation.
Assigning weights to the transportation exibilities, let

TFH The exibility of highway transportation
TFR The exibility of railway transportation
TFC The exibility of combined transportation
The pairwise comparison and normalized matrices for the transportation reliabilities are obtained
likewise by using the exibility coefcients of TFH (1.000), TFR (0.400), and TFC (0.466). The
average value of each row in normalized matrix represents the relevant exibility weights of the trans-
portation modes. Thus, the priority vector for exibilities involves the following weights (Table XVII).
6.11. Relative weights for transportation criteria

In assigning weights to the transportation modes, seven criteria were taken into consideration: (i)
transportation cost TC; (ii) transportation speed TS; (iii) transportation safety TSf; (iv) transportation
accessibility TA; (v) transportation reliability TR; (vi) transportation eco-friendliness TE; and (vii)
transportation exibility TF. In making the pairwise comparisons, the DMs used their judgments about
the relative meaning and importance of these criteria with respect to the goal. However, the following
points were considered during the pairwise comparisons.
The company gives a high priority to transportation cost.
Transportation speed has a little importance because the total delivery is to take place within a week.
The company pays all the insurance costs of transported goods. Besides, they have experienced and
well-trained drivers. Therefore, counting on the low accident rate of railway transportation, the safety
concern is also pushed back with respect to the transportation speed.
The rest of the criteria are given quite low priorities as compared with the rst three criteria.
At the end of discussions within the company, the following results were reached on the basis of the
relative importance factors given in Table III.
TC : 1:000 TS : 3:000 TSf : 5:000 TA : 7:000 TR : 6:000 TE : 9:000 TF : 8:000
The pairwise comparison and normalized matrices for the transportation criteria are obtained
likewise. The average value of ach row in normalized matrix represents the relevant weights of the
transportation cost, transportation speed, transportation safety, transportation accessibility,
transportation reliability, transportation eco-friendliness, and transportation exibility. Thus, the
priority vector for the transportation criteria involves the following weights (Table XVIII).
Table XVII. Pairwise comparison matrix for exibility.
Flexibility TFH TFR TFC Priority vector

TFH 1.000 2.500 2.146 0.536
TFR 0.400 1.000 0.858 0.214
TFC 0.466 1.166 1.000 0.250
TFH, the exibility of highway transportation; TFR, the exibility of railway transportation; TRC, the exibility of combined
transportation.
DOI: 10.1002/atr
Table XVIII. Pairwise comparison matrix for the transportation criteria.
Criteria TC TS TSf TA TR TE TF P vector

TC 1.000 3.000 5.000 7.000 6.000 9.000 8.000 0.481
TS 0.333 1.000 1.665 2.329 1.994 3.000 2.664 0.160
TSf 0.200 0.600 1.000 1.399 1.198 1.802 1.600 0.096
TA 0.143 0.429 0.714 1.000 0.856 1.288 1.144 0.069
TR 0.167 0.500 0.833 1.167 1.000 1.505 1.336 0.080
TE 0.111 0.333 0.556 0.778 0.667 1.000 0.888 0.054
TF 0.125 0.375 0.625 0.875 0.750 1.125 1.000 0.060
TC, transportation cost; TS, transportation speed; TSf, transportation safety; TA, transportation accessibility; TR, transportation
reliability; TE, transportation eco-friendliness; TF, transportation exibility.
6.12. Consistency tests

In order to decide on the consistency level of the decision, we need to calculate separately the CRs for
each level of hierarchy. For this purpose, the principle Eigenvalues (max s) and the RI gures should
be determined.
By using the priority vector numbers and the corresponding RI gure taken from Table II. max, CI,
and CR values can be computed for each level of hierarchy as follows.
Level 1: transportation criteria (general)
We add each column of the reciprocal matrix and multiply these column summations with their
corresponding normalized weights.
Principle Eigenvalue (max) = 2.079(0.481) + 6.237(0.160) + 10.393(0.096) + 14.548(0.069) + 12.465
(0.080) + 18.720(0.054) + 16.632(0.060) = 7.005
max 7 0:001
CI 0:001 CR 0:001 < 0:10 perfect consistency
6 1:32
Level 2: transportation criteria (with respect to the transportation modes)

Transportation cost
Principle Eigenvalue (max) = 4.531(0.221) + 2.575(0.388) + 2.557(0.391) = 3
max 3 0
CI 0 CR 0 < 0:10perfect consistency
2 0:58
Transportation speed
max 3 0
CI 0 CR 0 < 0:10 perfect consistency
2 0:58
Transportation safety
Principle Eigenvalue (max) = 6.833(0.146) + 2.050(0.488) + 2.733(0.366) = 2.998
max 3 0:001
2 0:58
Transportation accessibility
DOI: 10.1002/atr
max 3 0:001
2 0:58
Transportation reliability
max 3 0:010
2 0:58
Transportation eco-friendliness
max 3 0
2 0:58
Transportation exibility
max 3 0
2 0:58
Consistency tests result with perfect consistency on the decision. All values are consistent.
6.13. Results
The criterion priorities and the priorities of each decision alternative relative to each criterion are
combined in order to develop an overall priority ranking of the decision alternative that is termed as
priority matrix. The overall composite weight of each alternative choice is computed on the basis of
the weight of levels 1 and 2. The overall weight is just normalization of linear combination of
multiplication between weight and priority vector. All the selected parameters and their weightings
are summarized in Table XIX.
When we look at the table, regarding the weights of the main criteria, we see that the cost has an
apparent superiority over the other criteria. It has the highest weight (0.481), which is at least three
times bigger than the weights of the other criteria. The speed takes the second row with its weight
of 0.160. Weights of the other main criteria are between 0.054 (eco-friendliness) and 0.096 (safety).
It is seen also from the table that the highway transportation is best in exibility (0.536), accessibil-
ity (0.507), speed (0.451), and worst in safety (0.146). Whereas, the railway transportation is best in
safety (0.488), eco-friendliness (0.403), cost (0.388), and worst in exibility (0.214). The combined
transportation performs quite parallel with the railway transportation. It is best in cost (0.391)
Table XIX. Priority matrix for transportation mode selection.
TC TS TSf TA TR TE TF Overall
(0.481) (0.160) (0.096) (0.069) (0.080) (0.054) (0.060) P vector
Highway 0.221 0.451 0.146 0.507 0.358 0.226 0.536 0.301
Railway 0.388 0.263 0.488 0.231 0.319 0.403 0.214 0.352
Combined 0.391 0.286 0.366 0.262 0.323 0.371 0.250 0.348
TC, transportation cost; TS, transportation speed; TSf, transportation safety; TA, transportation accessibility; TR, transportation
reliability; TE, transportation eco-friendliness; TF, transportation exibility.
DOI: 10.1002/atr
eco-friendliness (0.371), safety (0.366), and worst in exibility (0.250). The relative priority variation
of the alternative transportation modes with respect to the criteria is displayed in Figure 3.
In the AHP model, there exist seven main criteria (cost, speed, safety, accessibility, reliability, eco-
friendliness, and exibility) and 21 sub-criteria (seven main criteria for each transportation mode) to
make a selection among the three transportation alternatives (highway transportation, railway
transportation, and combined transportation). The two-level hierarchy of the transportation mode
selection is shown in Figure 4
The results indicate that the railway transportation received the highest priority (0.352), whereas the
combined (railway + highway) transportation received a quite high priority (0.348). The railway
Figure 3. Relative priority variation of the alternative transportation modes with respect to the criteria.
Figure 4. Hierarchy of the transportation mode selection.
transportation seems slightly better than the combined transportation, but the difference between the
weightings of these two transportation modes is very small and only 0.86%. It is because the combined
transportation utilizes 89% highway (1136 km) in its total road distance (1276 km). On the contrary,
the highway transportation received considerable lower priority (0.301) owing to the facts that its
DOI: 10.1002/atr
transportation cost is high, and the importance of speed and accessibility criteria is low. Consequently,
the logistics rm selected the mode of railway transportation as the most suitable one for its customer.
7. CONCLUSION
In this study, an AHP model was employed for the selection of the most suitable transportation
mode for a logistics company in Turkey. Only highway, railway, and combined transportation
modes were evaluated during the selection process with respect to several criteria. Other modes
of transportation (seaway and airway) were not taken into consideration because of their limited
operations in freight transportation. In spite of its suitable geographical site, the seaway
transportation along the coastal regions is not being used extensively and effectively in the
country. Although the air transportation is expanding rapidly, it is not still preferred by the
logistics rms due to its high cost and accessibility problems.
There was only one route to be considered for the case. Of course, alternative routes could be
generated but they would be far beyond the economical considerations. On the given route, ight
is possible only from stanbul to Adana, which is 70 km away from Mersin. There is no direct
ight between orlu and Mersin. Therefore, it could be an alternative combined mode with
highway or railway integration from orlu to stanbul and from Adana to Mersin. At the same
time, it would be too expensive to transport 300 tons of freight weekly. Therefore, the logistic
companies do not take into consideration this mode of transportation under similar conditions.
The results have indicated that the railway or the combined (railway + highway) transportation
was much more favorable than the highway transportation under the given conditions. The
difference in calculated priorities between these two transportation modes was negligible. On
the contrary, the highway transportation has received considerable lower priority owing to the
facts that its transportation cost was high and the importance of speed and accessibility criteria
was low. If the speed and other parameters are assumed to be constant, the only parameter that
has a varying impact on the decision process of transportation mode selection is the cost of
transportation. Therefore, the AHP analysis should be repeated in times of dramatic uctuations
occurring in the cost of transportation. Moreover, the relative weights of the parameters are up
to the choices of the logistics rms.
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JOURNAL OF ADVANCED TRANSPORTATION

J. Adv. Transp. 2014; 48:974999

Analytic hierarchy process application in selecting the mode of

Mesut Kumru1* and Pnar Yldz Kumru2

Copyright 2013 John Wiley & Sons, Ltd.

2. TRANSPORTATION FUNCTION IN LOGISTICS

2.1. Selection criteria for transportation modes

2.2. Transportation modes

2.2.1. Highway transportation

2.2.2. Railway transportation

2.2.3. Waterway transportation

2.2.4. Airway transportation

2.2.5. Pipeline transportation

2.2.6. Combined (multi-modal) transportation

2.3. Fleet management

Table I. Comparison of transportation modes (1 = the best, 5 = the worst).

Selection Transportation modes

Criteria Railway Highway Seaway Airway Pipeline

3. MULTI-CRITERIA DECISION-MAKING: THE METHODOLOGY AND METHODS

Multi-criteria decision-making applications in transportation and AHP applications in particular, were

5. ANALYTIC HIERARCHY PROCESS: A DECISION SUPPORT SYSTEM TOOL

5.1. The methodology of analytic hierarchy process

Figure 1. Summary of two-level hierarchy for selecting an alternative.

Table III. The analytic hierarchy process comparison scale.

Absolute value Denition

If CR 0.10, the inconsistency is acceptable, otherwise, the subjective judgment is to be revised.

5.2. The benets of analytic hierarchy process

Table IV. Random consistency index values for n from 1 to 10.

6.2. Problem denition

Figure 2. Alternative transportation routes depicted on the map of western Turkey.

6.3. Cost analyses of transportation modes

6.3.1. Highway transportation

Cost of the return trip empty 28623:5*0:40 TL 11449:2:

Total weekly cost of highway transportation 28623:5 11 449:2 555 TL 40627:7

Table V. Storage cost at Mersin port.

6.3.2. Railway transportation

Total weekly cost of railway transportation 623 15423 7046:5 TL 23092:5:

6.3.3. Combined transportation

6.4. Relative costs

Table VI. Storage cost at Haydarpaa railway station.

First day Second day Third day Fourth day Total

Table VIII. Pairwise comparison matrix for cost.

Cost TCH TCR TCC

6.5. Relative speeds

Assigning weights to the transportation speeds, let

Table IX. Normalized matrix for cost.

Cost TCH TCR TCC Priority vector

Table X. Transportation speeds and their relative equivalents.

Mode of transportation Speed of transportation (km/h) Relative speed

Table XI. Pairwise comparison matrix for speed.

Speed TSH TSR TSC Priority vector

6.6. Relative safeties

Assigning weights to the transportation safeties, let

6.7. Relative accessibilities

Table XII. Accident rates and their relative equivalents.

Mode of transportation Accident rates (accident/ton*km) Relative safety

Highway Railway Combined

Table XIII. Pairwise comparison matrix for safety.

Safety TSfH TSfR TSfC Priority vector

the share of highway in that mode, such that

Assigning weights to the transportation accessibilities ,let

6.8. Relative reliabilities

Assigning weights to the transportation reliabilities, let

Table XIV. Pairwise comparison matrix for accessibility.