Analytic Hierarchy Process (AHP)

AHP stands for Analytic Hierarchy Process. It is a multi-criteria decision making method, originally developed by Prof. Thomas L. Saaty. AHP derives ratio scales from paired comparisons of criteria, and allows for some small inconsistencies in judgments.

Inputs can be actual measurements, but also subjective opinions. As a result, ratio scales (weightings) and a consistency index will be calculated. For decision making with multiple inputs from different stakeholders, the geometric mean of individual inputs is used.

Mathematically the method is based on the solution of an Eigen value problem. The results of the pair-wise comparisons are arranged in a matrix. The first normalized Eigenvector of the matrix gives the ratio scale (weighting), the largest Eigenvalue determines the consistency ratio.

An explanation of the method can be found in my video on Youtube.

An Excel sheet, doing the calculation for up to 10 criteria, can be found in the download area. Download AHP slides.

AHP can be applied in many fields:

  • Evaluation of product features,
  • Cost-Benefit Analysis,
  • Strategy development,
  • Selection of Key Performance Indicators,
  • Deriving weights for a combined performance index,
  • Deriving a consolidated scale of importance from different inputs.

We used AHP for the evaluation of weights for the combined service index and  the hotline performance index. We also applied the method to evaluate the importance of different strategies, using multiple inputs from different colleagues, and to find the ranking of financial key performance indicators for the operational performance assessment of our companies.

Comments and feedback welcome!

AHP-ANP practical Application with Pros and Cons

The analytic hierarchy (AHP) and analytic network process (ANP) are two multi-criteria decision methods (MCDM), originally developed by Prof. Thomas L. Saaty.

ANP is a more general approach, based on the description of the problem by means of a network instead of a hierarchy as in AHP. On the other hand, ANP is also more complex in its application.

In my latest video presentation, pros and cons for both methods are shown, and a few tips for the practical application of AHP,  and setting up a network for ANP are listed.

Download the slides

Link to video in Youtube

Feel free to comment and feedback here!

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AHP Excel Template

NEW! BPMSG’s free AHP online software: For a quick evaluation of priorities use my AHP online calculator. If you need to handle a complete AHP hierarchy, try out my new AHP-OS System.

Download page of the AHP Excel Template:

Latest Version
Please download the latest version from here

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