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The Analytic Hierarchy Process



The Analytic Hierarchy Process (AHP) is a mathematical decision making technique that allows consideration of both qualitative and quantitative aspects of decisions. It reduces complex decisions to a series of one-on-one comparisons, then synthesizes the results.

Compared to other techniques like ranking or rating techniques, the AHP uses the human ability to compare single properties of alternatives. It not only helps decision makers choose the best alternative, but also provides a clear rationale for the choice. The process was developed in the 1970s by Thomas Saaty, then a professor at the Wharton School.


Purpose

On a daily basis, and with limited time, you need to make decisions regarding your family, your job, and many other issues. In a business or policy setting, you have to avoid emotional confrontations and pursue a rational, common denominator. Normally there are 2 to 3 proposals for the solution already under discussion, but also arguments with pros & cons. The Analytic Hierarchy Process facilitates the rational evaluation of these pros and cons.

It supports the pursuit of an optimal solution in a transparent manner, via:

* Qualitative and Quantitaive decision analysis
* simple evaluation & representation of solutions through Hierarchical Model
* logic arguments & clearing emotions
* checking quality of your decision
* little need of time for your team
* high acceptance

The process in theory

The Analytic Hierarchy Process relies on three fundamental assumptions:

* Preferences for different alternatives depend on separate criteria which can be reasoned about independently and given numerical scores.

* The score for a given criteria can be calculated from sub-criteria. That is, the criteria can be arranged in a hierarchy, and the score at each level of the hierarchy can be calculated as a weighted sum of the lower level scores.

* At a given level, suitable scores can be calculated from only pairwise comparisons.

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