[AHP on Excel]

Class 24 - THE ANALYTIC HIERARCHY PROCESS ON EXCEL

AHP: A rejoinder
n
In a system of equations such as (W&qI) w = 0, if wii=1, then j qk' n for all
k'1
eigenvalues qks that satisfy the equations. The eigenvalues qks constitute a measure
of consistency of the AHP. If the answers of DM are totally consistent, the
principal eigenvalue qmax= n and qk= 0 for all other k's.
Should one perturb the entries wijs by a small amount, the eigenvalues q (&4 # q#
4) change by small amounts. Small variations in wijs keep the qmax close to n and
the rest close to 0, some of which may be slightly less than 0. The result qmax$n
always holds.

A consistency index (CI)

qmax& n
$ 0 (1)
n &1

will measure the "closeness to consistency". In general, a CI less than 0.1 is

considered acceptable.

Notice again that the process consists of normalizing w's, or setting wi = i and
adding the equation ji i' 1 . Perturbations on the W matrix will yield qmax$ n
even for a perfectly symmetrical W matrix. An example of these observations are
documented below: CI (v) = 0.026, CI (vR) = 0, CI (vP) = 0.56, CI (vS) = 0.103.
With the exception of the `risk' criterion, the interviews yield rather inconsistent
result, with the `performance' inconsistent and `schedule' inconsistency exceeding
the CI maximum of 0.1 set by Saaty (1980). While one can argue that the Schedule
consistency is marginally acceptable, s/he still needs to conduct the Performance
interview again to obtain a more reliable ranking.

An EXCEL code for AHP

Want to purchase a new payroll system and is considering X, Y, and Z.

3 key criteria: price, user support, and ease of use (See EXCEL code).

1 Pairwise Comparisons

Formula for cell C6:=1 /D5

Formula for cell C7:=1 /E5
Formula for cell D7:=1/E6
2 Normalizing the Comparisons

Cells Fl3, F14, and F15 indicate that the average scores on the price criterion for X,
Y, and Z are 0.724, 0.193, and 0.083 respectively.
Figure 1 - Price criterion pairwise comparison
3 Consistency

Consistency measures are shown in cells G13 through G15, leading toward the
Consistency Index or Ratio.

4 Obtaining Scores for the Remaining Criteria

Repeat the process for the user support and ease-of-use criteria. Results are shown
in the "Support" and "Ease" spreadsheets.
Figure 2 - Support criterion pairwise comparison

Figure 3 - Ease-of-use criterion pairwise comparison

5 Obtaining Criterion Weights

In the "Criteria" spreadsheet, the criterion weights are shown in cells Fl4 through
F16.
Figure 4 - Final AHP scoring model

6 Implementing the Scoring Model

The final weighted average scores are shown in cells C9 through E9 in the
"Summary' spreadsheet. (See EXCEL code.)