Modified analytic hierarchy process to incorporate uncertainty and managerial aspects

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Antony, J. and Banuelas, R. (2004) Modified analytic hierarchy process to incorporate uncertainty and managerial aspects. International Journal of Production Research, 42 (18). pp. 3851-3872. ISSN 0020-7543 (http://dx.doi.org/10.1080/00207540410001699183)

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Abstract

The analytic hierarchy process (AHP) is a powerful multiple-criteria decision analysis technique for dealing with complex problems. Traditional AHP forces decision-makers to converge vague judgements to single numeric preferences in order to estimate the pairwise comparisons of all pairs of objectives and decision alternatives required in the AHP. The resultant rankings of alternatives cannot be tested for statistical significance and it lacks a systematic approach that addresses managerial/soft aspects. To overcome the above limitations, the present paper presents a modified analytic hierarchy process, which incorporates probabilistic distributions to include uncertainty in the judgements. The vector of priorities is calculated using Monte Carlo simulation. The final rankings are analysed for rank reversal using analysis of variance, and managerial aspects (stake holder analysis, soft system methods, etc.) are introduced systematically. The focus is on the actual methodology of the modified analytic hierarchy process, which is illustrated by a brief account of a case study.

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