Welcome to BPMSG – September 2017

Concepts, Methods and Tools to manage Business Performance

Dear Friends, dear Visitors,

Over the last three months I did a lot of under-the-hood changes and clean-up on the website to improve safety and user experience. As you may have noticed, the protocol is now https: the web traffic is encrypted using an SSL client certificate. After some tweaking the page performance could be improved significantly, it is nearly reduced by half. All pages, including my AHP-OS online software and the diversity calculator, were made mobile friendly, though I don’t recommend to use AHP-OS on a small mobile phone screen.

In addition some new features were added to the AHP-OS online software:

I also wrote a paper about the AHP software implementation, where you can find a description of the structure and all mathematical formulas and references. Please make a reference to this paper, when you use the software in your work to be published.

Kindly support my effort, either with a donation, or at least give a 1 (poor) to 5 (excellent) rating to my web posts, which will help me to get some feedback on my work.

For now, please enjoy your visit on the site and feel free to leave a comment – it is always appreciated.

Klaus

Klaus D. Goepel,

Singapore, September 2017

BPMSG stands for Business Performance Management Singapore. As of now, it is a non-commercial website, and information is shared for educational purposes. Please see licensing conditions and terms of use.

AHP-OS Update Version 2017-08-31

The latest update of AHP-OS comprises of some minor changes to make the program flow easier to understand for participants w/o background in AHP.

  • The group session input screen does no longer show the headline to login or register, as for participants there is no need to be registered.
  • The text introduction was shortened to two and a half line of text.
  • Menu buttons intended to be clicked are highlighted.

Continue reading AHP-OS Update Version 2017-08-31

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?

Continue reading Sensitivity Analysis in AHP

Incoming search terms:

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Why the AHP Balanced Scale is not balanced

As part of my current work about AHP scales, here an important finding for the balanced scale:

Salo and Hamalainen [1] pointed out that the integers from 1 to 9 yield local weights, which are not equally dispersed. Based on this observation, they proposed a balanced scale, where local weights are evenly dispersed over the weight range [0.1, 0.9]. They state that for a given set of priority vectors the corresponding ratios can be computed from the inverse relationship

r = w / (1 – w)      (1a)

The priorities 0.1, 0.15, 0.2, … 0.8, 0.9 lead, for example, to the scale 1, 1.22, 1.5, 1.86, 2.33, 3.00, 4.00, 5.67 and 9.00. This scale can be computed by

wbal = 0.45 + 0.05 x     (1b)

with x = 1 … 9 and

 (1c)

c ( resp. 1/c) are the entry values in the decision matrix, and x the pairwise comparison judgment on the scale 1 to 9.

In fact, eq. 1a or its inverse are the special case for one selected pairwise comparison of two criteria. If we take into account the complete n x n decision matrix for n criteria, the resulting weights for one criterion, judged as x-times more important than all others, can be calculated as:

(2)

Eq. 2 simplifies to eq. 1a for n=2.

With eq. 2 we can formulate the general case for the balanced scale, resulting in evenly dispersed weights for n criteria and a judgment x with x from 1 to M:

(3)

with

(3a)

(3b)

(3c)

We get the general balanced scale (balanced-n) as

(4)

Continue reading Why the AHP Balanced Scale is not balanced

Incoming search terms:

  • ahp scaling

The Analytical Hierarchy Process (AHP) – Is it old and outdated?

This was a question in researchgate.net, and the answer of Prof. Saaty – the creator of the method – is of course: “The AHP is the only accurate and rigorous mathematical way known for the measurement on intangibles. It is not going to get old for a long time., with a lot of answers from others following.

When it comes to AHP, it seems the scientific world is still divided in opponents and advocates of the method.

I answered with the statistic of my website: BPMSG has more than 4000 users of the online software AHP-OS, 600 of them active users with 1000 projects and more than 3500 decision makers. My AHP excel template reached nearly 21 thousand downloads.  It clearly shows that the method is not outdated.

As a reply Nolberto wrote:

No, I don´t think that AHP is outdated, but the fact that over than 1000 projects have been developed using AHP does not mean that their results are correct (which is impossible to check), or that the method is sound (which is easily challenged)… 

Here my answer:

yes, I agree, the numbers only show that AHP is not outdated (which was the original question). They don’t show, whether the results are correct or incorrect, but they also do not show whether the users did or did not realise the method’s drawbacks and limitations.

For me, as a practitioner, AHP is one of the supporting tools in decision making. The intention of a tool is what it does. A hammer intends to strike, a lever intends to lift. It is what they are made for.

From my users feedback I sometimes get the impression that some of them expect a decision making support tool to make the decision for them, and this is not what it is made for.

In my practical applications AHP helped me and the teams a lot to gain a better insight into a decision problem, to separate important from less important criteria and to achieve a group consensus and agreement how to tackle a problem or proceed with a project. Probably, this could be achieved with other tools too, but as you say, AHP is simple, understandable and easy.

For sure, real world problems are complex. Therefore they have to be broken down and simplified, to be handled with the method, and I agree, over-simplification can be dangerous. On the other hand, what other approach than the break down of complex problems into digestable pieces is possible?

Finally, it’s not the tool producing the decision, but the humans behind it. They will be accountable for the decision, and it’s their responsibility to find the appropriate model of a decision problem and the right balance between  rational and non-rational arguments and potential consequences of their decision.

Let me know your opinion!

 

Welcome to BPMSG – Feb 2017

Concepts, Methods and Tools to manage Business Performance

Dear friends, dear visitors,

Using Google search for my own website, I could see a message like Your website is not mobile friendy. It was really time to update my website theme in order to make it better readable for visitors using their smart phone or tablet.

Now you see the new design using the standard wordpress theme from 2015. I simplified the menu structure to the categories:

  • AHP Articles – Material and Information about the Analytic Hierarchy Process
  • Other Articles – Material and Information about Business Performance
  • Tools – Links to my online tools, like the AHP online system and excel templates
  • Other – Posts related to other topics
  • About – Information about the author
  • Feedback – A place where you can leave your feedback as comments
  • Contact – A web form to contact me personally via e-mail

I hope with these changes navigation on the site is much easier, and you can find required information in shorter time.

Again, a big Thank You to all donors! Please note that the website is a non-commercial website for educational purposes. Your donation is used to cover running costs like web hosting, antispam services etc. PLEASE, help to support this website with a small donation. I spend a lot of time, sharing my knowledge for free. Thank you in advance!

For now, please enjoy your visit on the site and feel free to leave a comment – it is always appreciated.

Klaus D. Goepel,

Singapore, Februar 2017

BPMSG stands for Business Performance Management Singapore. As of now, it is a non-commercial website, and information is shared for educational purposes. Please see licensing conditions and terms of use.

Please give credit or a link to my site, if you use parts in your work, or make a small donation to support my effort to maintain this website.

About the author

AHP Frequently Asked Questions

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, or the description about the  Software Implementation of AHP-OS.

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 (Excel template) or my paper Software Implementation of AHP-OS.

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: Yes, you can select and delete individual participants from a project .

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.

Incoming search terms:

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AHP online software – a reminder

If you are a registered user of my AHP online software, please keep in mind and be aware:

After 3 months of inactivity, your user account will be deactivated automatically. Please reactivate, using the link provided in the e-mail, if you want to keep your data, otherwise your account and all your data will be deleted 48 hours after deactivation.

This is done to ensure a slim database and help to keep the software fast and responsive. Please also avoid multiple registrations under different user names and e-mail addresses. You can keep up to 20 projects in your account, and it should be sufficient for the majority of users.

AHP online program limits:

  • Number of hierarchy levels: 6 max.
  • Number of hierarchy nodes: 50 max.
  • Number of criteria/node: 15 max. ( 7 to 9 recommended)
  • Number of hierarchy end nodes: 150 max.
  • Number of Alternatives: 10 max.
  • String length for nodes/leafs: 35 char max.
  • Number of characters for hierarchy definition: 6000

Thank you for your cooperation, and PLEASE – as a registered user – help to support this website with a small donation. I do not have a commercial interest, but I spend a lot of time, sharing my knowledge for free, and I have running costs to keep the site alive.

Thank you!

Welcome to BPMSG – October 2015

Concepts, Methods and Tools to manage Business Performance

Dear Friends, dear Visitors,

it’s soon coming to five years that my webpage has been online, and things getting slowly a bit messy … There was a need to clean-up the pages, posts and directories, so that the necessary maintainance will take less time, and future updates are possible. As you should know, this project is done in my free time as a hobby, I still have a full-time job for another couple of years.

Unfortunatly, during the whole process, some links were broken and it will take time to repair. Sorry, when you experience missing images or a broken link. Just let me know using my contact page. I am still working on it and plan to simplify the navigation in order  to make it easier for you to find relevant information.

AHP as one category, where you find information about the analytic hierarchy process, will stay in focus. From the start this was the nost frequently visited part of the site, and my AHP excel template slowly reaches 15 thousand (!) downloads. Under  the category Articles you find posts about other topics, mainly the concept of diversity, as I was using it for  different applications. All more personal related  topics under the category Other will move to my new personal blog – Klaus & Lita – running on my own server with topics like multicopter, programming and – maybe – cooking in future.

For now, please enjoy your visit on the site and feel free to leave a comment – it is always appreciated.

Klaus D. Goepel,

Singapore, October 2015

BPMSG stands for Business Performance Management Singapore. As of now, it is a non-commercial website, and information is shared for educational purposes. Please see licensing conditions and terms of use.

Please give credit or a link to my site, if you use parts in your work, or make a small donation to support my effort to maintain this website.

About the author