Day 1 - Team H

Analytic Hierarchy Process:

The analytic hierarchy process (AHP) is a structured technique for organizing and analyzing complex decisions. It provides a comprehensive and rational framework for structuring a decision problem, for representing and quantifying its elements, for relating those elements to overall goals, and for evaluating alternative solutions.  The application areas include government institutions, healthcare, financial institutions etc.

Rather than prescribing a "correct" decision, the AHP helps decision makers find one that best suits their goal and their understanding of the problem Users of the AHP first decompose their decision problem into a hierarchy of more easily comprehended sub-problems, each of which can be analyzed independently. The elements of the hierarchy can relate to any aspect of the decision problem—tangible or intangible, carefully measured or roughly estimated, well- or poorly-understood—anything at all that applies to the decision at hand.

As the hierarchy is put up, the decision makers methodically assess its various elements by comparing them to each other two at a time, with respect to their impact on an element above them in the hierarchy. In making the comparisons, the decision makers can use concrete data about the elements, but they typically use their judgments about the elements' relative meaning and importance. It is the essence of the AHP that human judgments, and not just the underlying information, can be used in performing the evaluations.

The evaluations are converted to numerical values that can be processed and compared over the entire range of the problem. A weight or priority which is numerical is derived for each element in the hierarchy, allowing varied and most of the time inconsistent elements to be compared to one another in a rational and consistent way. AHP is varied from other decision making techniques on the basis of this capability.

Finally, numerical priorities are calculated for each of the decision alternatives. These numbers represent the alternatives' relative ability to achieve the decision goal, so they allow a straightforward consideration of the various courses of action.

Fig- AHP framework

Source-

http//search.ebscohost.com

Authors-

Nishant Lal

Manish Lath