Read this. Enough for me to close my account there. Feel free to contact me via my BPMSG blog here.
Dear Friends, dear Visitors,
Nearly half a year has passed since my last update in May on this page, and the year 2013 is soon coming to an end. In June, I had the opportunity to present my practical experience with the Analytic Hierarchy Process (AHP) on the International Symposium ISAHP 2013 in Kuala Lumpur, Malaysia. You can download my paper here. It was interesting to meet the experts from around the world, dealing with decision making methods, and listening to some of their presentations. A short video shows my impressions of the meeting and the nice touristic spots in K.L.
I was invited to the panel discussion, and could discuss my newly introduced AHP consensus indicator for group decisions. It is based on the concept of diversity. Like AHP, diversity is a very interesting topic, as it can be applied in so many different areas. Originating from information theory (Shannon 1948), it became a well-established concept in ecology and economy. I used the principles to develop a key performance indicator (KPI), describing the diversification of businesses and the quality of growth. Feel free to watch my videos or read my posts on this blog.
What is coming next?
There will be one more video on my YouTube channel, showing the application of Shannon diversity to measure the quality of growth. Looking at diversity and growth over time we can display a growth trajectory of a company, giving a clear picture about the direction, where the company is heading.
The larger project will be the implementation of my AHP template as an AHP online tool. The idea is that you can input your criteria and do the pair-wise comparison online, to get as a result the calculated priorities. So at the moment I am busy to practice some web scripting and become more familiar with php. A first small exercise was my online diversity calculator.
Now please enjoy your visit on the site and feel free to give me feedback – it is always appreciated.
Klaus D. Goepel,
Singapore, Oct 2013
AHP stands for analytic hierarchy process, and belongs to the multi-criteria decision making methods (MCDM). 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. The core of AHP is the comparison of pairs instead of sorting (ranking), voting (e.g. assigning points) or the free assignment of priorities.
Read my simple write-up about AHP for people, who have not heared about the method. You might download it 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:
- Define the goal of the decision – what do I want to decide, for what purpose, and what are my alternatives?
- Structure the decision problem in a hierarchy – what are the categories and criteria that figure into my decision?
- 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?
- Calculate the priorities and a consistency index – were my comparisons logical and consistent?
- 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.
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.
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.
Incoming search terms:
- ahp intro wizard
If you need a quick calculation of diversity indices from your sample data, you might use my online diversity calculator here. Select the number of categories/classes (2 to 20) and input your samples data (positive integer or decimal numbers). As a result the following parameters and diversity indices will be calculated:
- Berger-Parker Index
- Shannon Entropy (nat)
- Shannon number equivalent (true diversity of order 1)
- Shannon Equitability
- Simpson Dominance
- Simpson Dominance (finite sample size)
- True diversity of order 2
- Gini-Simpson Index
- Gini-Simpson Equitability
Incoming search terms:
- how to calculate diversity software
- shannon weiner index calculator
- calculation of diversity by software
- online calculator for Shannon index
- shannon wiener calculator with steps
After some hours of programming and testing I have added this on-line check to my BPMSG link.
It reads your IP address and checks it for past suspicious activities. You could get a bad result, if your computer was formerly infected by a malicious program or used by a spammer.
Check it out!
Incoming search terms:
- how to clean ip address
Operating your own website or blog, you will soon realize lots of comments with nonsense content and embedded links to obscure websites. These are comment spammers making your life difficult. Everyday you have to clean up or moderate all comments. In the past I used a wordpress plugin “spam free wordpress” to protect my blog, and for long time it was working fine without any problems. Writing a comment to my postings, you were asked to copy and paste a password from one to another field in the comment form. Suddenly it was not working any longer, and I found out that the developer changed his policy: I have to pay a license fee. Maybe I also should change my policy, and ask for a license fee to download my AHP excel template? So I was searching for a new free plugin. I installed SI Captcha Anti-Spam from Mike Challis, but still spam comments were coming through. So I enabled the honeypot spambot trap and it seems to work.
What is a honey pot spambot trap?
I learned some new things about spam, and also found an interesting project “Project Honey Pot” on the web. There you can find out more about harvesters, spammers, dictionary attackers and honey pots. You can participate in the project, install a honey pot or implement a quick link to fight spam. A honey pot is a – for humans invisible – link to a dynamic website providing “fake” e-mail addresses and forms for spam programs. If the form is submitted or an e-mail sent to one of addresses provided there, then you can be sure it is a spammer and record/block his IP address. Here an example of a quick link (opens in a separate window, don’t submit.) Usually this link is hidden -only visible for bots, spider programs etc.
Project Honey Pot also provides a useful service HTTP Blacklist to check IPs against a list of known harvesters, comment spammers, and other suspicious visitors to websites.
Now I can monitor suspicious activities on my website: within only two days I could see more than 100 attacks!
List of recent suspicious visitors listed in project honeypot.
Check your own IP address.