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Application of stochastic analytic hierarchy process within a domestic appliance manufacturer

Banuelas, R. and Antony, J. (2007) Application of stochastic analytic hierarchy process within a domestic appliance manufacturer. Journal of the Operational Research Society, 58 (1). pp. 29-38. ISSN 0160-5682

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Abstract

The stochastic analytic hierarchy process (SAHP) provides a mechanism for achieving more effective selection of alternatives in the form of considering multi and conflicting criteria using quantitative and qualitative information under uncertainty. In contrast to the traditional analytic hierarchy process, the SAHP uses probabilistic distributions to incorporate uncertainty that people have in converging their judgements of preferences into a Likert scale. The vector of priorities is calculated using Monte Carlo simulation, the final rankings are analysed for rank reversal using statistical analysis, and managerial aspects are introduced systematically. The present paper demonstrates an application of the SAHP in a world-class domestic appliance manufacturer. The case study was carried out by strictly following a disciplined and organized methodology for applying the SAHP developed by the authors. The results of this study were encouraging to key personnel within the company, establishing a greater opportunity to explore the applications of the SAHP in other core business processes.