Analytical Hierarchy Process
What is it?
The analytical hierarchy process was developed by Thomas Saaty as a theory of measurement through pairwise comparisons and relies on the judgements of experts to derive priority scales. It provides a proven and effective means to deal with complex decision making and can help with the identification and weighting of criteria for selection, to analyze the collected data for the criteria and to accomplish more quickly the decision-making process.
Why is it important?
AHP works with both subjective and objective evaluation measures, provides a useful mechanism for control the consistency of the evaluation measures and alternatives suggested by the team to not influence the decision making. If it is combined with meeting automation, the organizations can minimize common difficulties of team decision making process, for example lack of focus, planning, participation or ownership, which ultimately are costly distractions that can prevent teams from making the right choice.
When to use it?
AHP is suitable for decision-making when are multiple criteria involved.
How to use it?
To make a decision in an organised way to identify priorities we need to make the following steps:
- Define the problem and determine the kind of knowledge search.
- Decompose the goal into its constituent parts, progress from the general to the specific. In its simplest form, this structure consists of a goal, criteria and alternative levels. Each set of alternatives would then be further divided into an appropriate level of detail, recognizing that the more criteria included, the less important each individual criterion may become.
- Third step is to assign a relative weight to each individual criterion. Each one has a local (immediate) and global priority. The sum of all the criteria beneath a given parent criterion in each tier of the model must equal one. Its global priority shows its relative importance within the overall model.
- After the criteria are weighted and the information is known, put all the information into the model. Scoring is on a relative basis, comparing one choice to another. Relative scores for each choice are calculated within each leaf of the hierarchy.
Author: Jana Loskotova