Decision making by AHP and

ANP
黃日鉦

東吳大學資訊管理學系
The Theoretical Foundation of the AHP
 Analytic hierarchy process (AHP) was
proposed by Saaty (1977, 1980) to model
subjective decision-making processes in a
hierarchical system.
 The applications of AHP can refer to
corporate planning, portfolio selection, and
benefit/cost analysis by government agencies
for resource allocation purposes.
 All decision problems are considered as a
hierarchical structure in the AHP
The general form of the AHP
The main four steps of the AHP

 Step 1. Set up the hierarchical system by

decomposing the problem into a hierarchy of
interrelated elements.
 Step 2. Compare the comparative weights between
the attributes of the decision elements to form the
reciprocal matrix.
 Step 3. Synthesize the individual subjective
judgments and estimate the relative weights.
 Step 4. Aggregate the relative weights of the
decision elements to determine the best
alternatives/strategies.
If we wish to compare a set of n attributes pairwise according to their relative
importance weights, where the attributes are denoted by a1, a2 ,..., an and the
weights are denoted by w1 , w2 ,..., wn , then the pairwise comparisons can be
represented as:
 a11 a1 j ain 
 
 
A   ai1 ain 
 , where aij  1/ a ji , aij  aik / a jk , aij  wi / w j .
aij

 
 
 an1 anj ann 
By multiplying A by w yield
 w1 w1 w1 

 w1 wj wn 
   w1   w1 
 
    
w wi wi   
Aw   i w  n  w j   nw , or ( A  nI ) w = 0.
w
 1
wj wn   j   
     
w 
   wn   n
 wk wn wn 
w wj wn 
 1
 Since solving the above equation is the eigenvalue problem, we can derive
the comparative weights by find the eigenvector w with respec to max which
satisfies Aw  max w , where max is the largest eigenvalue of the matrix A.

The ratio scale which is employed to compare the importance weight

between criteria according to the linguistic meaning from 1 to 9 with respect
to denote equal important to extreme important.

Intensity 1 3 5 7 9 2,4,6,8

Linguistic Equal Moderate Strong Demonstrated Extreme Intermediate

value
Furthermore, in order to ensure the consistency of the subjective perception
and the accuracy of the comparative weights, two indices, including the
consistency indexes (C.I.) and the consistency ratio (C.R.), are suggested. The
equation of the C.I. can be expressed as:

C.I. = ( max – n) / (n-1),

where max is the largest eigenvalue, and n denotes the numbers of the attributes.

Saaty (1980) suggested that the value of the C.I. should not exceed 0.1 for a
confident result. On the other hand, the C.R. can be calculated as:
C .I .
C.R.  ,
R.I .
where R.I. refer to an random consistency index which is derived from a large
sample of randomly generated reciprocal matrices using the scale
1/ 9,1/ 8, ,1, ,8,9.
The R.I. with respect to different size matrix is shown as

Number of
elements 3 4 5 6 7 8 9 10 11 12 13

R.I. 0.52 0.89 1.11 1.25 1.35 1.40 1.45 1.49 1.51 1.54 1.56

The C.R. should be under 0.1 for a reliable result, and 0.2 is the maximum
tolerated level.
Cogger and Yu’s method
Let
 aij if j  i,
T  [tij ]nn , where tij  
0 otherwise.
Define the upper triangular matrix
 wij if j  i,
U  [uij ]nn , where uij  
0 otherwise.
Let D be the diagonal matrix
n  i  1 if j = i,
D  [ dij ]nn , where dij  
0 otherwise.
From the above equations, we see that
Uw  Dw, and ( D 1U  I ) w  0.
1 0 0  1 w
 n  12 w1n  0 

0 1 0 0 1 w2 n  0 
( n 1    I )    ,   1, 1 , ,1 .
     2 n

  0 0

1 
 
0 
 0 0 1  

1 1 1 
n  1 w12 w1n 
n n  w1  0 
     
1  0 1
1
1
w2 n    2  )    , where max  1.
w 0
( D U  max I )  w  ( 
n 1 n    
     
   wn  0 
 0 0 1  1 
By incorporating the restriction of weights, we can obtain
1  n a12 a1n 1 a1n   w1  0 

 0 2n a2 n 1 a2 n   w2  0 
       .
     
 0 0 1 an 1n   wn  0 
 1 1 1    1 

Inducing the above equation from bottom to top, we obtain
wn 1  an 1n wn ,
1
wn  2  (an  2 n 1wn 1  an  2 n wn ),
2

1
w1  (a12 w2  a13 w3   a1n wn ).
n 1
Mathematical programming method
For the AHP, a near consistent matrix A with a small reciprocal multiplicative
perturbation of a consistent matrix is given by:

A W E
, where denotes the Hadamard product, W  [wij ]nn is the matrix of weight ratios,
and E  [ ij ]nn is the perturbation matrix, where  ij   ji .
1

From Aw  max w , it can be seen that

n

a w
n n
ij j  max wi  0 and max   aij w j wi    ij .
j 1 j 1 j 1
On the other hand, the multiplicative perturbation can be transformed to an
additive perturbation of a consistent matrix such that
n n
wi wi

j 1 w j
 ij  
j 1 w j
 ij , where  ij is the additive perturbation.
n n

Since a
j 1
ij w j wi    ij , we can rewrite the above equation as
j 1

n
wi wj n
wi n
wi
  
n n
  ij ) and wi
(
j 1 w j
aij
wi
)  (
j 1 w j
ij )  (
j 1 w j

j 1
ij   (aij 
j 1 wj
).

On the basis of the equations above, it can be seen that max= n if and only if all
 ij = 1 or  ij = 0, which is equivalent to having all aij  wi w j
, indicates the consistent situation.
Therefore, the problem of finding weights and C.I. in the AHP
is equivalent to solving the following mathematical
programming problem

n n
wi 2
min  (aij  ) ,
i 1 j 1 wj
n
s.t. w
i 1
i  1, wi  0.
Applications and Limitations of the
AHP
 Example (Saaty, 1996). A family of average
income wanted to buy a house and identified eight
criteria, that were important for them to select a
best house.
 SIZE- Size of house
 TRANS- Transportation
 NGHBRHD- Neighborhood
 AGE- Age of house
 YARD- Yard space
 MOD- Modern facilities
 COND- General condition
 FINANCE- Financing
The hierarchical structure

GOAL

SIZE TRANS NGHBRHD AGE YARD MOD COND FINANCE

HOUSE A HOUSE B HOUSE C

Factor Size Trans Nghbrhd Age Yard Mod Cond Finance Eigenvector
Size 1 5 3 7 6 6 1/3 1/4 0.175
Trans 1/5 1 1/3 5 3 3 1/5 1/7 0.062
Nghbrhd 1/3 3 1 6 3 4 1/2 1/5 0.103
Age 1/7 1/5 1/6 1 1/3 1/4 1/7 1/8 0.019
Yard 1/6 1/3 1/3 3 1 1/2 1/5 1/6 0.034
Mod 1/6 1/3 1/4 4 2 1 1/5 1/6 0.041
Cond 3 5 2 7 5 5 1 1/2 0.221
Finance 4 7 5 8 6 6 2 1 0.348

max  8.811 C.R.  0.083

Size A B C Priorities Yard A B C Priorities
A 1 5 9 0.743 A 1 6 4 0.391
B 1/5 1 4 0.194 B 1/6 1 1/3 0.091
C 1/9 1/4 1 0.063 C 1/4 3 1 0.218
Trans A B C Priorities MOD A B C Priorities
A 1 4 1/5 0.194 A 1 9 6 0.770
B 1/4 1 1/9 0.063 B 1/9 1 1/3 0.068
C 5 9 1 0.743 C 1/6 3 1 0.162
Nghbrhd
A B C Priorities Con A B C Priorities
A 1 9 4 0.717 A 1 1/2 1/2 0.200
B 1/9 1 1/4 0.066 B 2 1 1 0.400
C 1/4 4 1 0.217 C 2 1 1 0.400
Age A B C Priorities Finance A B C Priorities
A 1 1 1 0.333 A 1 1/7 1/5 0.072
B 1 1 1 0.333 B 7 1 3 0.650
C 1 1 1 0.333 C 5 1/3 1 0.278
Synthesize the priorities

Criteria Size Trans Nghbd Age Yard Mod Cond Finance

Weights 0.175 0.062 0.103 0.019 0.034 0.041 0.221 0.345

Criteria Size Trans Nghbd Age Yard Mod Cond Finance Overall

A 0.743 0.194 0.717 0.333 0.691 0.770 0.200 0.072 0.346

B 0.194 0.063 0.066 0.333 0.091 0.068 0.400 0.649 0.369

C 0.063 0.743 0.217 0.333 0.218 0.162 0.400 0.279 0.285

Limitations of the AHP

 The problem of consistency ( if C.R.>0.1 ? )

 Weighted geometric mean
1
 wi 
a  aij 
   , i, j  n.
ij w 
 j 
 Weighted arithmetic mean
 wi
a
 ij  (1   ) , i, j  n;
wj

aij   1
, i, j  n.
 wj
a ji  (1   )
 wi
Limitations of the AHP

 The problem of scales

 [9,1] is evenly distributed; [1,1/9] is skewed to the
right.
 Arrow’s independence of irrelevant
alternatives (IIA)
 Weighting the reciprocal matrix with the largest
number in each column for preserving the order
(Belton and Gear, 1983).- A revised AHP
General Form of the AHP- the ANP

 The analytic network process (ANP) was

proposed to overcome the MCDM problems
with interdependence and feedback effects.
 Step 1- To derive the local weights using the
AHP.
 Step 2- To formulate the supermatrix
according to the results of the local weights
and the network structure.
 Step 3- To raise the supermatrix to limiting
powers for obtaining the final results.
 The general form of the supermatrix
C1 C2 Cm
e11 e1n1 e21 e2 n2 em1 emnm
e11
e12
 W11 W12 W1m 
C1  
e1n1  
  ,where Cm denotes the mth
e21   cluster, emn denotes the nth
e22  
 W21  element in the mth cluster, and
W22 W2 m
W  C2   Wij is the local priority matrix
e2 n2   of the influence of the elements
 
  compared in the jth cluster to
  the ith cluster. In addition, if the
em1  
  jth cluster has no influence to
em 2
 Wm1 Wm 2 Wmm  the ith cluster, then Wij=0.
Cm
emnm
 There are several structures proposed by
Saaty, including hierarchy, holarchy,
suparchy, intarchy, etc., to demonstrate how
the network structure affects the supermatrix.
 Here, two simple cases which both have
three clusters are used to demonstrate how
to form the supermatrix based on the specific
network structure.
In Case 1, the supermatrix can be formed as the following matrix:
C1 C2 C3
C1  0 0 W13 
W  C2 W21 0 0 
C3 W31 0 W33 
Then, the supermatrix of Case 2 can be expressed as
C1 C2 C3
C1 W11 W12 W13 
W  C2 W21 W22 0 
C3  0 W32 0 
 After forming the supermatrix, the weighted
supermatrix can be derived by transforming all
columns sum to unity exactly, i.e., form a stochastic
matrix.
 Next, we raise the weighted supermatrix to limiting
powers for obtaining the global priority vectors or
called weights.
 If the supermatrix has the effect of cyclicity (i.e.,
exist two or more limiting supermatrices), the Cesaro
sum would be calculated to get the priority weights
Applications of the ANP

 Example 1. The key to develop a successful system

depending on the match of human and technology
factors. Assume the human factor can be measured by
the criteria of business culture (C), end-user demand
(E), and management (M). On the other hand the
technology factor can be measured by the criteria of
employee ability (A), process (P), and resource (R).
 In addition, human and technology factors are
affected each other as like as the following structure.
•The first step of the ANP is to compare the relative importance between
each criterion. For example, the first matrix below is to ask the question
“For the criterion of employee ability, how much the importance does one of
the human criteria than another.” The other matrices can easily be formed
with the same procedures.
•The next step is to calculate the influence (i.e., calculate the principal
eigenvector) of the elements (criterion) in each component (matrix).
 Ability Culture End-User Management Eigenvector
Culture 1 3 4 0.634
End-User 1/3 1 1 0.192
Management 1/4 1 1 0.174

Process Culture End-User Management Eigenvector

Culture 1 1 1/2 0.250
End-User 1 1 1/2 0.250
Management 2 2 1 0.500

Resource Culture End-User Management Eigenvector

Culture 1 2 1 0.400
End-User 1/2 1 1/2 0.200
Management 1 2 1 0.400
 Culture Ability Process Resource Eigenvector

Ability 1 5 3 0.637

Process 1/5 1 1/3 0.105

Resource 1/3 3 1 0.258

End-User Ability Process Resource Eigenvector

Ability 1 5 2 0.582
Process 1/5 1 1/3 0.109
Resource 1/2 3 1 0.309

Management Ability Process Resource Eigenvector

Ability 1 1/5 1/3 0.136
Process 5 1 3 0.654
Resource 3 1/3 1 0.210
Now, we can form the supermatrix based on the above
eigenvectors and the previous structure. Since the human factor
can affect the technology factor, and vise versa, the supermatrix
is formed as follows:
Finally, by calculating the limiting power of the weighted
supermatrix, the limiting supermatrix can be obtained as follows:
As we see, the supermatrix has the effect of cyclicity, and in this
situation the Cesaro sum (i.e., add the two matrices and dividing
by two) is used here to obtain the final priorities as follows:

In this example, the criterion of culture has the highest

priority (0.233) in system development and the criterion of
end-user has the least priority (0.105).
 Example 2. In order to show the effect of the
structure in the ANP, the other structure, which has
the feedback effect on human factors, is considered as
follows:
 There are two methods to deal with the self-
feedback effect. The first method simply
place 1 in diagonal elements and the other
method performs a pairwise comparison of
the criteria on each criterion. In this example,
we use the first method.
 With the same steps above, the unweighted
supermatrix, the weighted supmatrix, and the
limiting supermatrix can be obtained as
follows, respectively:
 Since the effect of cyclicity does not exist in this example, the
final priorities are directly obtained by limiting the power to
converge.
 Although the criterion of culture also has the highest priority, the
priority changes from 0.233 to 0.310.
 On the other hand, the least priority is resource (0.084) instead of
end-user.
 Compare to the priorities of the two examples, the structures play
the key to both the effects and the results.
 In addition, it should be highlighted that when we raise the
weighted matrix to limiting power, the weighted matrix should
always be the stochastic matrix.
Forming Structural Modeling

 (Fuzzy) Interpretive structural modeling (ISM) method

 DEMATEL (Decision Making Trial and Evaluation
Laboratory) Method
 (Fuzzy) Cognition Maps
 Structural equation model (SEM)
 Bayesian network
 Formal concept analysis
Interpretive structural modeling

 ISM is a computer-assisted methodology to construct and

to understand the fundamental relationships of the
elements in complex systems or situations.
 The theory of ISM is based on discrete mathematics,
graph theory, social sciences, group decision-making, and
computer assistance.
 The procedures of ISM are begun through individual or
group mental models to calculate binary matrix, also
called relation matrix, to present the relations of the
elements.
 The concepts of ISM
A relation matrix can be formed by asking the question like
“Does the feature ei inflect the feature e j ?” If the answer is
“Yes” then  ij  1 , otherwise  ij  0 .

The general form of the relation matrix can be presented as follows:

e1 e2 en
e1  0  12  1n 
e2   21 0  2 n 
D=
 
 
en  m1  m 2 0 
where ei is the ith element in the system,  ij denotes the relation
between the ith and the jth elements, and D is the relation matrix.
 After constructing the relation matrix, we can
calculate the reachability matrix as follows:
M  DI
M  = M k = M k+1 k 1

where I is the unit matrix, k denotes the powers, and

M  is the reachability matrix.
 Note that the reachability matrix is under the
operators of the Boolean multiplication and
addition (i.e., 11  1 and 1  1  1 ).
 Next, we can calculate the reachability set and the priority set
base, respectively, using the following two equations:
R(ti )  ei | mji  1

A(ti )  ei | mij  1

where mij denotes the value of the ith row and the jth
column of the reachability matrix.
 Finally, the levels and the relationships between the elements
can be determined and the structure of the elements’
relationships can also be expressed using the following
equation:
R(ti )  A(ti )  R(ti )
Example
 Assume the ecosystem consist of water (W), fish (F),
hydrophytes (H), and fisherman (M), and the relationships of
the elements above can be expressed as the following relation
graph and relation matrix:
 The relation matrix adds the identity matrix to form
the M matrix can be formed as follows:

 The reachability matrix can be obtained by powering

the matrix M as:

where the symbol (*) indicates the derivative relation

which does not emerge in the original relation matrix.
In order to determine the levels of the elements in a hierarchical
structure, the reachability set and the priority set are derived as:

ei R(ti ) A(ti ) R(ti )  A(ti )

1 1,4 1,2,3 1
2 1,2,4 2,3 2
3 1,2,3,4 3 3
4 4 1,2,3,4 4

Level 1 Fisherman
Level 2 Water
Level 3 Fish
Level 4 Hydrophytes
 The final results of the relationships of the elements, based on
the rechability matrix and the level information, can be
depicted as shown in the following graph:
The End