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ANALYTICAL HIERARCHY PROCESS

(AHP)
Oleh:
Nyoman Martha Jaya
Ir (UNUD-Bali);
MConstMgt (UNSW-Sydney);
PhD (Salford–Manchester);
GCInstCES (United Kingdom).
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PENDAHULUAN
Analytical Hierarchy Process (AHP) is a
process that helps us pick up one of the
options of a list of choices.
Each choice has a few parameters (criteria)
attached to it and we can set the weights of
each parameter and have AHP pick the best
choice from the list of choices.

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AHP
‘another way of decision making’

Dr.Thomas L. Saaty develop the AHP in the


early 1970’s.

THE PROCESS HAS BEEN USED TO ASSIST


NUMEROUS CORPORATE &
GOVERNMENT DECISION MAKERS.

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APPLICATION OF THE AHP
 STRATEGIC PLANNING
 RESOURCE ALLOCATION
 SOURCE SELECTION
 BUSINESS/ PUBLIC POLICY
 PROGAM SELECTION
 AND MUCH MUCH MORE

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Decision Problems
Examples of decision problems:
 Choosing a telecommunication system
 Formulating a drug policy
 Choosing a product marketing strategy
 Etc.

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Problem Structures
PROBLEMS ARE DECOMPOSED INTO A
HIERARCHY OF „CRITERIA‟ AND
„ALTERNATIVES‟
Problem

Criterion 1 Criterion 2 Criterion 3 ……. Criterion n


Criterion 1.1
Criterion 1.2

Alternative 1 Alternative 2 Alternative 3 ……. Alternative n


Alternative 1.1
Alternative 1.2
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A DECISION PROBLEM IN
PERSONAL LIVES

“A NEW CAR IN YOUR FUTURE”

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AHP’s Processes
AN IMPORTANT PART OF THE PROCESS
IS TO ACCOMPLISH THESE THREE STEPS:

1. STATE THE OBJECTIVE:


 SELECT A NEW CAR
2. DEFINE THE CRITERIA:
 STYLE, RELIABILITY, FUEL ECONOMY
3. PICK THE ALTERNATIVES:
 CIVIC COUPE, SATURN COUPE, FORD ESCORT,
RENAULT CLIO

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WHAT ABOUT COST ???

KEEP CALM and BE QUIET

WE‟LL TALK ABOUT THAT LATER

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THE INFORMATION IS ARRANGED
IN A HIERARCHICAL TREE

Select a
Objectives
NEW CAR

Criteria Style Reliability Fuel Economy

Alternatives Civic Civic Civic

Saturn Saturn Saturn

Escort Escort Escort

Clio Clio Clio

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RANKING
THE INFORMATION IS THEN
SYNTHESIZED TO DETERMINE
RELATIVE RANKINGS OF ALTERNATIVES

BOTH QUALITATIVE & QUANTITATIVE:


CRITERIA CAN BE COMPARED USING
INFORMED JUDGMENTS TO DERIVE
WEIGHTS AND PRIORITIES

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FUNDAMENTAL ABSOLUTE NUMBERS
OF SAATY’S NINE SCALES
Intensity of
Definition Explanation
Importance
1 Equal Importance Two activities equally contribute to the objective
2 Weak or slight
Experience and judgement slightly favour one
3 Moderate Importance
activity over another
4 Moderate plus
Experience and judgement strongly favour one
5 Strong importance
activity over another
6 Strong plus
Very strong or demonstrated An activity is favoured very strongly over another; it
7
importance is dominance demonstrated in practice
8 Very, very strong
The evidence favouring one activity over another is
9 Extreme importance
of the highest possible order of affirmation
If activity i has one of the above
nonzero numbers assign to it
Reciprocals
when compare to activity j, then j A reasonable assumption
of above
has the reciprocal value when
compared with i
May be difficult to assign the best value but when
compared with other contrasting activities the size of
1.1 to 1.9 If the activities are very close the small numbers would not too noticeable, yet they
can still indicate the relative importance of the
activities.
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DETERMINE THE RELATIVE
IMPORTANCE OF THE CRITERIA
USING JUDGMENTS TO DETERMINE THE RANKING
OF THE CRITERIA
Think….:
Reliability is the most important followed by Style and
Fuel Economy is least important, so It would make the
following judgments:

a. RELIABILITY IS 2 TIMES AS IMPORTANT AS STYLE


b. STYLE IS 3 TIMES AS IMPORTANT AS FUEL
ECONOMY
c. RELIABILITY IS 4 TIMES AS IMPORTANT AS FUEL
ECONOMY
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Pairwise Comparison Matrices
USING PAIRWISE COMPARISONS, THE RELATIVE
IMPORTANCE OF ONE CRITERION OVER ANOTHER
CAN BE EXPRESSED:
(1)equal, (3)moderate, (5)strong, (7)very strong, (9)extreme

Style Reliability Fuel Economy


Style 1/1 1/2 3/1
Reliability 1/1 4/1
Fuel Economy 1/1

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Reciprocals

Style Reliability Fuel Economy


Style 1/1 1/2 3/1
Reliability 2/1 1/1 4/1
Fuel Economy 1/3 1/4 1/1

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Eigenvector
HOW TO SOLVE FOR THE EIGENVECTOR:

1. A SHORT COMPUTATIONAL WAY TO OBTAIN


THIS RANKING IS TO RAISE THE PAIRWISE MATRIX
TO POWERS THAT ARE SUCCESSIVELY SQUARED
EACH TIME.
2. THE ROW SUMS ARE THEN CALCULATED AND
NORMALIZED.
3. THE COMPUTER IS INSTRUCTED TO STOP WHEN
THE DIFFERENCE BETWEEN THESE SUMS IN
TWO CONSECUTIVE CALCULATIONS IS SMALLER
THAN A PRESCRIBED VALUE.
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Ranking of Priorities
GET A RANKING OF PRIORITIES FROM A
PAIRWISE MATRIX

DR THOMAS L. SAATY, CURRENTLY WITH THE


UNIVERSITY OF PITTSBURGH, DEMONSTRATED
MATHEMATICALLY THAT THE EIGENVECTOR
SOLUTION WAS THE BEST APPROACH.

REFERENCE :
Saaty (1990); and Saaty & Vargas (2012):
THE ANALYTIC HIERARCHY PROCESS (AHP)

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