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Session (AHP)

This document discusses two multi-criteria decision making methods: TOPSIS and AHP. It provides an overview of Analytic Hierarchy Process (AHP), which involves structuring multiple criteria in a hierarchical way, then using pairwise comparisons to determine the relative importance of criteria and rate alternatives. An example is given of an individual considering three job options based on criteria like salary, quality of life, interest in work, and proximity to family. AHP is applied to build a hierarchy, determine criteria weights through pairwise comparisons, then rate each job on each criterion and synthesize the results to produce overall scores and a ranking of the job alternatives.

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53 views16 pages

Session (AHP)

This document discusses two multi-criteria decision making methods: TOPSIS and AHP. It provides an overview of Analytic Hierarchy Process (AHP), which involves structuring multiple criteria in a hierarchical way, then using pairwise comparisons to determine the relative importance of criteria and rate alternatives. An example is given of an individual considering three job options based on criteria like salary, quality of life, interest in work, and proximity to family. AHP is applied to build a hierarchy, determine criteria weights through pairwise comparisons, then rate each job on each criterion and synthesize the results to produce overall scores and a ranking of the job alternatives.

Uploaded by

Fun Toosh345
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPT, PDF, TXT or read online on Scribd
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Multi Criteria Decision Making:

TOPSIS & AHP

Dr. Surya Prakash Singh


PhD (IIT Kanpur), PDF (NUS Singapore, MIT USA)
Department of Management Studies
Indian Institute of Technology Delhi
E-mail: surya.singh@gmail.com
1
The problem
There are m alternatives and n attributes
(criteria) on the basis of which the m
alternatives are to be ranked.
The criteria may be tangible or intangible
The importance of the criteria to the
decision maker is represented by weights
assigned to each of the criteria

2
Analytic Hierarchy Process (AHP)

Based on a hierarchical structure of the


goal, objectives and alternatives
(The Goal at the highest level, alternatives at the lowest
level and objectives or criteria in between)
The weights of the criteria or objectives
need not be known a priori but are
determined by pair-wise comparisons

3
Hierarchical Structure

Goal

Criteria

Alternatives

4
Scale for pair-wise comparison
1 Equally preferred
2 Equally to Moderately preferred
3 Moderately preferred
4 Moderately to Strongly preferred
5 Strongly preferred
6 Strongly to Very Strongly preferred
7 Very Strongly preferred
8 Very to Extremely Strongly preferred
9 Extremely preferred
5
Steps
Develop hierarchy
Perform pair-wise comparison of attributes
and determine priority vector (B2)
For each attribute perform pair-wise
comparison of the alternatives and
determine priority vector Vi for i =1,…,n
Matrix B3= V1, V2 ,…,Vn
Synthesize to determine scores vector
B3*B2T
6
Normalization and averaging
Divide the elements of each column by
sum of that column
Add the elements in each resulting row
and divide this sum by the number of
elements in the row

7
An example
Anil is about to graduate from college and is
trying to determine which job to join. He has
three options to choose from. He considers
four criteria (objectives) to meet the goal :
– High starting salary
– Quality of life in the city where job is located
– Interest in the type of work
– Nearness of job to family

8
Problem hierarchy

Satisfaction with a Job

Nearness to
Starting Salary Life Quality in City Interest in Job
Family

Job A Job B Job C

9
Pair-wise comparison at criteria level
Salary Quality Interest Nearness Priority
Vector (B2)
Salary 1 5 2 4 0.51

Quality 1/5 1 1/2 1/2 0.099

Interest 1/2 2 1 2 0.24

Nearness 1/4 2 1/2 1 0.148

10
Pair-wise comparison at alternative level

Salary Job A Job B Job C Priority


Vector V1

Job A 1 2 4 0.571

Job B 1/2 1 2 0.296

Job C 1/4 1/2 1 0.143

11
Pair-wise comparison at alternative level

Quality Job A Job B Job C Priority


Vector (V2)

Job A 1 1/3 1/2 0.163

Job B 3 1 2 0.540

Job C 2 1/2 1 0.297

12
Pair-wise comparison at alternative level

Interest Job A Job B Job C Priority


Vector (V3)

Job A 1 1/3 1/3 0.168

Job B 2 1 2 0.484

Job C 3 1/2 1 0.349

13
Pair-wise comparison at alternative level

Nearness Job A Job B Job C Priority


Vector (V4)

Job A 1 1/4 1 0.167

Job B 4 1 4 0.667

Job C 1 1/4 1 0.167

14
Finding final scores for the alternatives

V1 V2 V3 V4 B2

0.571 0.163 0.168 0.167 0.51 0.372


Job A

0.099
0.296 0.540 0.484 0.667 = 0.419
0.24
Job B
0.143 0.297 0.349 0.167 0.148 0.210

Job C

Rank in descending order of scores


Job B, Job A, Job C
15
Thank You!

16

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