## AHP-OS Implementation – working paper

For anyone, who is interested in the implementation of my free AHP-OS online software, and needs a reference:

Goepel, K. D. (2017). Implementation of an Online Software Tool for the Analytic Hierarchy Process – Challenges and Practical Experiences.  Working paper prepared for publication, Singapore July 2017, available from http://bpmsg.com/ahp-software/

I hope to finalize the paper soon so that I can submit it for publication.

## Sensitivity Analysis in AHP

Sensitivity analysis is a fundamental concept in the effective use and implementation of quantitative decision models, whose purpose is to assess the stability of an optimal solution under changes in the parameters. (Dantzig)

#### Weighted sum model (Alternative Evaluation)

In AHP the preference Pi of alternative Ai is calculated using the following formula (weighted sum model):
(1)with  Wj the weight of criterion Cj, and aij the performance measure of alternative Ai with respect to criterion Cj. Performance values  are normalized.
(2)

Example

Table 1

Sensitivity analysis will answer two questions:

• Which is the most critical criterion, and
• Which is the most critical performance measure,

changing the ranking between two alternatives?

#### The most critical criterion

The most critical criterion is defined as the criterion Ck, with the smallest change of the current weight Wk by the amount of  δkij changing the ranking between the alternatives Ai and Aj.

The Absolute-Top (or AT) critical criterion is the most critical criterion with the smallest change δkij changing the ranking of the best (top) alternative.

The Absolute-Any (or AA) critical criterion is the most critical criterion with the smallest change δkij changing any ranking of alternatives.

For each pair of alternatives Ai, Aj, with i = 1 to n and  i < j we calculate
(3)with .

Example

Table 2

• The absolute-top critical criterion is Neighbourhood: a change from 18.8% by -8% will change the ranking between the top alternative A1 (House A) and alternative A2 (House B).
• The absolute-any critical criterion is the same as above, as -8% is the smallest value in the table.

As the weight uncertainty for the criterion Neighbourhood is +1.4% and -1.3%, the solution is stable.

#### The most critical measure of performance

The most critical measure of performance is defined as the minimum change of  the current value of  aij such that the current ranking between alternative Ai  and Aj will change.

For all alternatives Ai and Aj  with ij and  and each criterion we calculate
(4)with .

Example

Table 3

• The absolute-any critical performance measure is found for alternative A3 (House C) under the criterion Financing. A change from 27.9% by 20.4% will change its ranking with alternative A2 (House B), i.e. only a (drastic) change from 27.9% to 48.3% of the evaluation of House C with respect to Financing would change the ranking of House C and House B.

#### Implementation in AHP-OS

For alternative evaluation the method described above is implemented in AHP-OS. On the group result page in the Group Result Menu tick the checkbox var and then click Scale.

Under the headline Sensitivity Analysis TA and AA critical criterion as well as AA critical performance measure will be displayed. You can download the complete tables as csv files with a click on Download.

#### References

Triantaphyllou, E.,  Sánchez, A., A sensitivity analysis approach for some deterministic multi-criteria decision making methods, Decision Sciences, Vol. 28, No. 1, pp. 151-194, (1997).

## AHP Judgment Scales

The original AHP uses ratio scales. To derive priorities, verbal statements (comparisons) are converted into integers from 1 to 9. This “fundamental AHP scale” has been discussed, as there is no thoretical reason to be restricted to these numbers and verbal gradations. In the past several other numerical scales have been proposed [1],[3]. AHP-OS now supports nine different scales:

1. Standard AHP linear scale
2. Logarithmic scale
3. Root square scale
4. Inverse linear scale
5. Balanced scale
6. Balanced-n scale
8. Power scale
9. Geometric scale

Fig. 1 Mapping of the 1 to 9 input values to the elements of the decision matrix.

Power scale and geometric scale extend the values of matrix elements from 9 to 81 resp. 256. Root square and logarithmic scale reduce the values from 9 down to 3 resp 3.2. Inverse linear and balanced scale keep the values in the original range, but change the weight dispersion. The balanced-n scale is a corrected version of the original balanced scale. The adaptive-bal scale scales the values depending on the number of criteria: for n = 2 criteria it represents the balanced scale, for n = 10 criteria it represents a balanced power scale.

As a result, priority discrimination will be improved using the geometric or power scale, but at the same time the consistency ratio will go up. For the  logarithmic, root square, and inverse linear scales it is the opposite, priorities are more compressed or “equalised” across the criteria, see Fig. 2. At the same time CR improves.

Only the balanced-n scale and adaptive-bal scale will improve (or at least keep) the consistency ratio in a reasonable range and at the same time minimise weight uncertainties and weight dispersion.

Fig. 2 Change of priorities for different scales for an example with eight criteria.

The choice of the appropriate scale is difficult and an often discussed problem. Until today there is no published guideline, when to select which scale. A study on the impact on priorities and consistency ratio (CR) is published in [2]. I have just recently submitted a paper, providing a guideline on the selection of different AHP scales.

#### How to select different scales in AHP-OS

Open a project with completed judments (participants) from your project list. In the Project menu click on View Result. By default the results are then shown calculated based on the standard AHP 1 to 9 scale. To recalculate for different scales, select the scale in the Group Result menu from the scroll down list and click on Scale.

#### References

`[1] Ishizaka A., Labib A. Review of the main developments in the analytic hierarchy process, Expert Systems with Applications, 38(11), 14336 - 14345, (2011)`

`[2] Jiří Franeka, Aleš Krestaa. Judgment scales and consistency measure in AHP, Procedia Economics and Finance, 12, 164 - 173 (2014)`

`[3] W.W. Koczkodaj. Pairwise Comparison Rating Scale Paradox, Cornell University Library, (2015) https://arXiv.org/abs/1511.07540`

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Most data generated with AHP-OS can be downloaded as csv files for import into a spreadsheet program and further analysis:

• From the Hierarchy Input Menu – decision hierarchy and local & global priorities
• From the Group Result Menu – Priorities by node and consolidated decision matrix
• From the Project Data Menu – Decision matrices from each participant

For each download you can select “.” or “,” as decimal separator. The downloaded csv (text) file is coded in UTF-8 and supports multi-language characters like Chinese, Korean, Japanese and of course a variety of Western languages.

### How to import into excel?

Open Excel, click on “File” -> “New” to have a blank worksheet. Click on “Data“. On the left top you will find the “Get External Data” box.

Click on From Text to select the downloaded cvs file for import. The Text Import Wizzard will open.

Now it is important to select 65001 : Unicode (UTF-8) under File origin.

Then, depending on your decimal separator, select Comma or Semicolon as Delimiters:

When the import is done, your text characters should be displayed correctly.  Save the file “Save as” as Excel workbook (*.xlsx).

#### Incoming search terms:

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Over the year I receive many questions about AHP, my AHP excel template and my AHP online Software. Here a selection of frequently asked questions:

### General Questions

Q: I have 15 criteria and 20 alternatives, can you extend your template/software?
A: The excel template can handle up to 10 criteria, my online software is limited to 12 criteria (in one hierarchy level) and 10 alternatives. In principle it could be extended, but the limitation is inherit to the AHP method. Please read my explanations here.

Q: I have more than 10 alternatives, can I use AHP for priority evaluation of criteria and a different method for the evaluation of alternatives?
A: Yes, you can combine AHP for criteria evaluation with another method for alternative evaluation. Alternative evaluation could be done for example using a simple table with a yes/no or applicable/not applicable scale, or any other scale, e.g. Likert scale, how good the individual alternative matches the specific criterion.

Q: I have 150 participants, can I use your excel template/software?
A: My AHP excel template is limited to 20 inputs, my AHP online software can handle a (practically) unlimited number of participants. Use the AHP online software.

Q: How can I resolve the inconsistency (CR>0.1), when participants are done with their pairwise comparisons.
A: Once the pairwise comparison is done and submitted, data can not be changed and consistency ratio is what it is. Ask your decision makers to adjust their judgments  in direction of the most consistent input during the pair-wise comparisons for the highlighted three most inconsistent comparisons. Please see also my posting here.

Q: Can I use the Likert scale instead of the AHP scale?
A: No, AHP is based on the rational scale 1/9 … 1 … 9. It cannot be replaced by the Likert scale.

Q: Do you support Fuzzy AHP?
A: No, I have made no provisions to support Fuzzy AHP, neither in Excel, nor in my online software.

Q: How is the computation done, where do I find the description and formulas?
A: Please download the manual for the excel template from here, and the software description from here.

Q: How can I cite your work, can you give me a reference?
A: Please cite my paper: Implementing the analytic hierarchy process as a standard method for multi-criteria decision making in corporate enterprises–a new AHP excel template with multiple inputs

### AHP Excel template

Q: Can I extend the number of participants to more than 20?
A: Though it is possible in principle, the better way is to use my AHP online software with (practically) unlimited number of participants. I will not do a further extension of the template.

Q: Do you have a version of the Excel template w/o multiple inputs?
A: Yes, a simplified version is available on request from the author.

Q: How can I do alternative evaluation using your Excel template.
A: It is not possible. The template can only handle one category of a hierarchy and calculate the priority of one set of criteria.

### AHP Online software

Q: If I have a group of decision makers, do they need to register for the online software?
A: No, they don’t need to register. As the owner of a project you get a link for group decision inputs. Simply send them the link, and they can start the pairwise comparisons.

Q: Can I erase/delete inputs from individual participants from the group results?
A: Sorry, at the moment there is no possibility to erase/delete inputs of individual participants. You can open a project with participants’ input and click “Use consol. priorities”. Then “Reset priorities” and “Save hierarchy”. Then you will have the same hierarchy as a new project without participants’ input.

Q: The alternative evaluation is not working?
A: Criteria evaluation (priorities) and alternative evaluation have to be handled as two different projects. Only when you have a decision hierarchy with completed comparisons and evaluated priorities, you can define the alternatives from the group result page clicking on “Use consol. priorities”. Define number and name of alternatives from there and save as new project. Hierarchy evaluation and alternative evaluation projects appear as type “H” for the first and type “A” for the latter in your project list.

Q: Can I get the source code of your online software?
A: Sorry, it is not an open source project.

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## AHP-OS online software – Frequently Asked Questions

Note: All answers assume that you are a registered user and logged in.

Q: How do I save a new AHP hierarchy definition?

The hierarchy window is displayed. Define a new hierarchy in the text input field and click on Submit new hierarchy, then Save in the Hierarchy Input Menu.

The group session window will open. Optionally provide a project short description and  click Go, and the defined hierarchy is stored and shown as type “H” (Hierarchy) in the project table of the Session Administration Menu.

Q: How can I define and store a project for the evaluation of alternatives?

A: Start with a hierarchy definition, save and resume from the project table by clicking on the session code link. Complete all pairwise comparisons (Click on AHP in the hierarchy) to define the weights of criteria. (Before alternatives can be evaluated, criteria weights need to be defined.) Submit for group evaluation and view the result. In the group result page click on Use consol. priorities.

Then click on Evaluate Alternatives in the decision hierarchy display. Provide number and names of your alternatives and save a new project. It will be saved as type “A” (Alternative Evaluation). From there you can resume and start the alternative evaluation.

Q: How can I use a defined and stored hierarchy definition as template for a new project or new group session?

A: Click on the session code link of the project, you want to use, in the Stored AHP project session table.

a)      If the project has no participants, the project will be opened in the group session input mode. Click on Leave, then Close in the Active Session Menu.

b)      If the project has participants, the project will be opened in the AHP Group result window. Click on the Resume link at the bottom of the page, then Leave and Close in the Active Session Menu as in a).

You can now re-use the hierarchy definition and save as a new project.

## BPMSG’s AHP-OS free AHP web based software – How to use

With the latest version of my free AHP software you can manage complete AHP projects, including the handling of group sessions. In order to use the full functionality, you need to register (it’s free).

Here you might download a short description: BPMSG AHP Online System (pdf)

## Updated AHP Excel template Version 2013-12-24

In this latest update of my AHP excel template, input sheets were modified to show the proposed ideal judgments for the three most inconsistent inputs, resulting in a lower consistency ratio CR.

Example

On the left side judgment A9, A7 and A6 are highlighted as inconsistent, CR is 32%. The consistent judgment is shown as A4, A9 and A3. After correction with the proposed intensities (right side) the consistency ratio decreases to 7% below the required threshold of 10%.

## AHP Introduction

This is my 2-page simple write-up about AHP for people, who have not heared about the method. You might download the paper as pdf document.

## Principia Mathematica Decernendi

or “Mathematical Principles of Decision Making” is the title of a book by Prof. Thomas L. Saaty, in which he describes his method for the mathematical treatment of decision problems, which he developed in the 70s. Called AHP, it is now used around the world in many different fields. AHP stands for analytic hierarchy process, and belongs to the multi-criteria decision making methods (MCDM) group.

In AHP, values like price, weight, or area, or even subjective opinions such as feelings, preferences, or satisfaction, can be translated into measurable numeric relations.

Mathematically, the method is based on the solution of an “eigenvalue problem” – but this is mentioned here only tangentially and is not meant to dissuade anyone.

### Analytic hierarchy process

The basic steps in the solution of a decision problem using AHP are quite simple:

1. Define the goal of the decision – what do I want to decide, for what purpose, and what are my alternatives?
2. Structure the decision problem in a hierarchy – what are the categories and criteria that figure into my decision?
3. Pair comparison of criteria in each category – e.g. blue or green? Which do I prefer, and by how much do I prefer one or the other color?
4. Calculate the priorities and a consistency index – were my comparisons logical and consistent?
5. Evaluate alternatives according to the priorities identified – what alternative optimum solution is there to the decision problem?

Sometimes alternatives are already implicitly defined by the problem and it is sufficient merely to define the priorities.

The core of AHP is the comparison of pairs instead of sorting (ranking), voting (e.g. assigning points) or the free assignment of priorities. Validation of the method in practical testing shows surprisingly good agreement with actual measured values.

One of the most interesting fields and a very current application of AHP is the identification of suspects by witnesses in criminal cases, where the candidates for identification are not shown all together or sequentially, but in pairs. AHP is then used to evaluate the results. Initial studies show that this increases the reliability of identification from 55 % to 83 % and reduces the false identification rate from 20 % to 17 %, and that the consistency index is a good measure of the reliability of statements by witnesses.

### Example

To demonstrate how the method works, let us take a simple example. I want to buy an MP3 player. I have the choice of colors (pink, blue, green, black, red), storage (8, 16, 32, 64 Gbyte), and availability (immediate, 1 week, 1 month). The available models are:

• Model A – pink, 32 Gbyte, immediate availability, USD 120
• Model B – blue , 16 Gbyte, immediate availability, USD 120
• Model C – black , 32 Gbyte, 1 week wait, USD 150
• Model D – red, 64 Gbyte, 1 month wait, USD 150

We can structure the problem hierarchically as shown in Fig. 1.  In the solution process itself each element is compared by pairs in each category and sub-category, and the criteria are weighted.

Fig. 1 AHP hierarchy for solving a decision problem

### Complex decision problems and networks

For complex decision problems a two-layer model can be introduced, in which hierarchies are examined separately by the criteria Benefits (B), Opportunities (O), Costs (C) and Risks (R). This is known as the BOCR model. The problem is then evaluated using the simple formula (B*O)/(C*R) (multiplicative) or (B+O)-(C-R) (additive).

The analytical network process (ANP) is a further development of AHP. In it, the decision problem is modeled not as a hierarchy, but as a network. However, its practical application and mathematical treatment are much more involved.

### Applications

AHP has been used successfully in many institutions and companies. Although the method is so universal, it is still simple enough to execute in Excel. One of AHP’s great advantages is the ability to use it for group decisions, in which all participants evaluate pairs and the group result is determined as the mathematically optimum consensus. In practice the solutions arrived at by the method are well accepted, since the results are objective and free of political influence.

Examples of projects in a business context are the weighting of key performance indicators (KPI) or the identification of key strategies for sustained growth.

Klaus D. Goepel – Singapore Aug 2013.

Calculate priorities using my AHP online calculator or handle a complete AHP project using my AHP online system.

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