Multi Criteria Decision Making

By Kardi Teknomo, PhD.

AHP

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Decision making

In this section of tutorial, you will learn background materials with several terminologies such as criteria or factors, alternatives choice, evaluation score value and weight of importance level and how to transform different range of judgments into fair evaluation.

We make many decisions in our life. We decide which school to take, which place to live, which clothes to use, which persons to be our best friends or to marry, which food to eat, which car to buy, and so on.

Decision making is process to choose among alternatives based on multiple criteria. In each of these decisions, deep in our mind we have several factors or criteria on what to consider and we also have several alternatives choices that we should decide. On group decision making these criteria and alternatives are more obvious and must be determined first before we give some judgment score or evaluation values on them. In this tutorial, I will use the word 'factors' and 'criteria' interchangeably. Similarly, I use 'alternative' and 'choice' for the same meaning. Table 1 below shows example of criteria and alternatives of several decision makings.

Table 1: Example of Goal, Criteria and Alternatives

Goal

Criteria

Alternatives

Decide best school

  • Distance,
  • Reputation,
  • Cost,
  • Teacher kindliness

Name of schools under consideration

Finding best apartment

  • Price,
  • Down payment,
  • Distance from shops,
  • Distance from work/school
  • Neighbor's Friendliness

List of apartments under consideration

Select best politician

  • Charm
  • Good working program
  • Benefit for our organization
  • Attention to our need

List of candidates

Determine thesis topic

  • Fast to finish,
  • Research Cost ,
  • Level of Attractiveness,

List of thesis topics

Buy car

  • Initial Price
  • Operating & Maintenance cost,
  • Service and comfort,
  • Status

Car's trade mark (Honda, GM, Ford, Nissan etc.)

Decide whether to buy or to rent a machine

  • Total cost (capital, maintenance, operational)
  • Service
  • Time to operate
  • Interconnection with other machines

Rent or Buy

The determination of criteria and alternatives are very subjective. Notice that the list of criteria and alternatives above are not exhausted list. They neither cover all possible criteria nor all possible alternatives. There is no correct or wrong criterion because it is subjective opinion. Different people may add or subtract those lists. Some factors may be combined together and some criterion may be broken down into more detail criteria.

Most of decisions makings are based on individual judgments. As we try to make our decision as rational as possible we need to quantify these subjective opinions into subjective values . The values are number within any certain range; say from 1 to 10 or -5 to 5. The values can be any number with order (ordinal number) and you can even put different range for each factor. Higher value indicates higher level of the factor or preferable values. Now you see that not only the criteria and alternatives are subjective, even the values are also subjective. They are depending on you as decision maker.

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These tutorial is copyrighted .

Preferable reference for this tutorial is

Teknomo, Kardi. (2006) Analytic Hierarchy Process (AHP) Tutorial .
http://people.revoledu.com/kardi/tutorial/AHP/