Analytical Hierarchy Process for Higher Effectiveness of Buyer Decision Process (original) (raw)
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Decision Making Using the Analytic Hierarchy Process (AHP); A Step by Step Approach
Analytical Hierarchy Process is one of the most inclusive system which is considered to make decisions with multiple criteria because this method gives to formulate the problem as a hierarchical and believe a mixture of quantitative and qualitative criteria as well. This paper summarizes the process of conducting Analytical Hierarchy Process (AHP).
Decision making with the analytic hierarchy process
Decisions involve many intangibles that need to be traded off. To do that, they have to be measured along side tangibles whose measurements must also be evaluated as to, how well, they serve the objectives of the decision maker. The Analytic Hierarchy Process (AHP) is a theory of measurement through pairwise comparisons and relies on the judgements of experts to derive priority scales. It is these scales that measure intangibles in relative terms. The comparisons are made using a scale of absolute judgements that represents, how much more, one element dominates another with respect to a given attribute. The judgements may be inconsistent, and how to measure inconsistency and improve the judgements, when possible to obtain better consistency is a concern of the AHP. The derived priority scales are synthesised by multiplying them by the priority of their parent nodes and adding for all such nodes. An illustration is included.
Analytic Hierarchy Process in multi criteria decision making
This research on technology makes a first approach to the selection of an amphibious landing ship with strategic capabilities, through the implementation of a multi-criteria model using Analytical Hierarchical Process (AHP), in which a significant group of alternatives of latest technology has been considered. The variables were grouped at different levels to match design and performance characteristics, which affect the life-cycle as well as the acquisition, maintenance and operational costs. The model yielded an overall measure of effectiveness and an overall measure of cost of each kind of ship that was compared each other inside the model and showed in a Pareto chart. The modelling was developed using the Expert Choice software, based on AHP method.
A Literature Review on Ahp ( Analytic Hierarchy Process )
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This paper examines the pattern of development of the AHP research. The Analytic Hierarchy Process (AHP) was introduced by T.L. Saaty, is an effective tool for dealing with complex decision making, and may aid the decision maker to set priorities and make the best decision. The analytic hierarchy process (AHP) is a theory of measurement through pairwise comparisons and relies on the judgments of experts to derive priority scales, these scales that measure intangibles in relative terms. The ratio scales are derived from the principal Eigen vectors and the consistency index is derived from the principal Eigen value.
Evaluation of Factors in Buying Decision Process of Furniture Consumers by Applying AHP Method
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There are not many wooden products that consumers would buy on pure impulse. Their decision regarding the purchase of a product normally undergoes a process of consideration-the more expensive the product, the more thorough the consideration. The consumer buying decision process consists of fi ve stages: need recognition, search for information, alternatives evaluation, purchase decision and post-purchase behaviour. A company must establish what is important for consumers in each stage of this process. On the basis of these fi ndings, the company must defi ne the measures to infl uence consumers in individual phases. In this study, the analytic hierarchy process was used to analyse the buying behaviour of potential furniture buyers. Slovenian and Croatian marketing experts were asked about the habits, requests and needs of furniture buyers. The results of the research can serve as useful information for companies producing wooden products in the formulation of successful marketing strategies.
Analytic Hierarchy Process Decision Making Algorithm
Decision making in today's world certainly incorporates the consideration of assessment in view of a number of criteria, instead of a favored single criteria. Solving a multi-criteria decision issue offers decision makers suggestions, regarding the best decision choices (Alternatives). At the point when discovering the best decision of alternatives, subject to various distinctive criteria is almost impossible, the Analytic Hierarchy Process (AHP) has been very instrumental, effective, extraordinary and much of the time utilized strategy in solving problems in much complex decision making processes. This paper briefly discusses MultiCriteria Decision Making (MCDM) and AHP as one of the most popular MCDM methods for group decision making. Also, steps, techniques and formulae used in AHP have been discussed to help handle the problems arising from choosing alternative(s). Finally, the paper offers recommendations to researchers and professionals to apply AHP methodology techniques when analyzing multiple, complicated and conflicting decision making problems.
2020
Everyone makes decisions almost daily about routine purchases. When different items (e.g bread, milk) provide the same quality and quantity then potentially, the purchase decision is based on monetary grounds. However, when the additional criteria like quantity, quality, etc, change, such a situation demands activation of a simplistic form of multi-criteria analysis which is performed by our brain. However, when the purchases are non-routine and have multi-criteria then those become complex which prompts us to consult our friends and sometimes the relevant specialist persons for good guidance. One such example may be a decision to buy a car which in addition to the capital cost, more parameters come into play like fuel economy, availability of spare parts, operation and maintenance cost, safety, and others. The above two situations generally don’t demand any kind of analytical or other processes to address its complexity, however, projects of commercial or communal interest do demand such where conflicts in terms of individual subjectivity surface. To address the subjectivities, Mathematicians and Statisticians have developed various tools and processes. Multi-Criteria Decision Analysis (MCDA) is a sub discipline of operations research that explicitly evaluates multiple conflicting criteria in decision making (Multiple-criteria decision analysis, 2020). The Analytic Hierarchy Process (AHP) is a general theory of measurement that has found its widest applications in multi-criteria decision making, planning, and resource allocation, and in conflict resolution (Saatay, 1987). The AHP method makes it possible to assign a value representing the preference degree for a given alternative to each additional alternative. Such values can be used to classify and select alternatives based on a hierarchical structure (Junyi Chai, August 2013). AHP is the most widely used method for evaluating software (Ashu Gupta, 2010). AHP has also been applied to supplier and vendor selection (Maggie C.Y. Tam, April 2001). Recent approaches have combined AHP with other methods (Ahn, March 2017). AHP helps capture both subjective and objective evaluation measures, providing a useful mechanism for checking their consistency relative to considered alternatives, thus reducing bias in decision making (Mann, 1995). The weighting values in the AHP, which reflect the status or role of various factors in the evaluation process, directly affect the decision-making results (S. Prechaverakul, 1995). Consultation is the first step toward designing, execution, and operation of a sustainable project. The same help in conflict resolution, conducting trade-offs, and bringing in objectivity. AHP helps to smoothen the whole process by taking away personal subjectivities. The process is observable and without manipulation but there is an intrinsic challenge. Which is that why a certain weightage is assigned to the component, and its factors and sub-factors? This in-built flaw has derived a considerable amount of objection to it (MCDA or AHP methods for different alternatives, 2020). Given its flaw, it is still a good process and widely used by many professionals across the globe. MCDA is a family of methods whereas AHP is one of the approaches to address the method (MCDA or AHP methods for different alternatives, 2020). In this approach, the following steps are required to successfully conclude the effort (Asim, 2020); 1. Clearly defining the objective 2. Defining criteria for success 3. Assigning weights to criteria and its factors and sub-factors 4. Listing all the potential project options 5. The rating according to a pre-defined scale in a group for more objectivity. I prefer the Likert Scale. 6. Calculate and rank
How to make a decision: The Analytic Hierarchy Process
This paper serves as an introduction to the Analytic Hierarchy Process -A multicriteria decision making approach in which factors are arranged in a hierarchic structure. The principles and the philosophy of the theory are summarized giving general background information of the type of measurement utilized, its properties and applications.
AN APPLICATION OF ANALYTIC HIERARCHY PROCESS (AHP) WITH MULTI EXPERT AND MULTI ALTERNATIVE
The problem of purchasing a mono type flashlight for all the staff working at a shipyard is a good application for AHP (Analytic hierarchy process) because of its nature. The staff working at site or on board normally do their jobs in a special environment where inside of tanks and blocks are completely dark. Personal preferences, depending on the experiences and habits affect the flashlight choices of the staff. This makes the purchasing problem; a multi criteria and multi attribute decision making (MCMADM) problem which complies with AHP. E. K. Gencsoy from BV Istanbul/Turkey has developed a method to do this as explained in this study.