Assignment Report

Management Science
Analytical Hierarchical Process

Submitted to - Submitted by –
Dr. Harpreet Kaur PGDM | C
Rishabh Agarwal
17DM185
 TABLE OF CONTENTS

S. No. Topic Page No.

1 Problem Statement 1
Data Collection
2

2.1 Judgement on criteria

2

2.2 Judgement on Cost

3

2 2.3 Judgement on Safety 4

2.4 Judgement on Style 4

2.5 Judgement on Service 5

2.6 Judgement on Mileage 6

3 Analysis 7
4 Conclusion 8
1. PROBLEM STATEMENT
A college is considering to buy a car for providing the transportation services to their guests
coming to the college. The college has been considering this proposal from a reasonably long
time and now the management has agreed upon. The management surveyed and seek responses
from the existing cab drivers about what have been the usual responses from the guests in past
time when they sit in the car. Also, they analysed the price of the car, mileage performance of
the car and other relevant features. After taking all into consideration, they have set upon
certain criteria like Cost, Safety, Style, Service and Mileage upon which various alternatives
will be compared upon.
After surveying in the market, college is facing difficulty to choose the best option for them
amongst Car A, Car B, Car C, Car D and Car E. Each car is ranking considerably better
than others under certain criteria. The management has to decide the best option for them out
of the available decision alternatives with Cost, Safety, Style, Service and Mileage as criteria
for decision making,
Analytical Hierarchical Process is used to take a wise decision. In order to arrive at the optimal
solution, relative importance of each criteria and decision alternatives is studied. The
assignment is aimed at analysing the college’s decision and help them find the best car for the
college meeting their requirements.

The hierarchy for the college can be diagrammed as:-

Cost Car A,B,C,D,E

Safety Car A,B,C,D,E

Choose the best

car for the Style Car A,B,C,D,E
college

Service Car A,B,C,D,E

Mileage Car A,B,C,D,E

1
2. DATA COLLECTION
The fundamental scale for pairwise comparisons for analysing which criteria is more important
in reaching the goal and also how much more important it is than the other ones.

Intensity of
Importance Definition Explanation
Equal
1 Importance Both elements contribute equally to the objective
Moderate Experience and judgement slightly favour one element over
3 Importance another
Strong Experience and judgement strongly favour one element over
5 Importance another
Very strong
7 importance One element is favoured very strongly over another
Extreme The evidence favouring one element over another is of the highest
9 importance possible affirmation

Note – Intensities 2,4,6,8 can be used to express the intermediate values.

 Judgements made by the college for the criteria for decision making.
9 8 7 6 5 4 3 2 1 0 1 2 3 4 5 6 7 8 9
Cost Safety

Cost Style

Cost Service

Cost Mileage

Safety Style

Safety Service

Safety Mileage

Style Service

Style Mileage

Service Mileage

2
MS-Excel which uses mathematical calculations to convert these judgments to priorities for each of the
five criteria.

Factor Priority
Cost 19.96%
Safety 52.92%
Style 07.96%
Service 04.06%
Mileage 15.07%

 Judgement made by the college on the basis of criteria amongst the decision alternatives.

a) COST
9 8 7 6 5 4 3 2 1 0 1 2 3 4 5 6 7 8 9
Car A Car B

Car A Car C

Car A Car D

Car A Car E

Car B Car C

Car B Car D

Car B Car E

Car C Car D

Car C Car E

Car D Car E

Factor Priority
Car A 21.49%
Car B 04.24%
Car C 55.32%
Car D 07.01%
Car E 11.91%

3
 b) SAFETY
9 8 7 6 5 4 3 2 1 0 1 2 3 4 5 6 7 8 9
Car A Car B

Car A Car C

Car A Car D

Car A Car E

Car B Car C

Car B Car D

Car B Car E

Car C Car D

Car C Car E

Car D Car E

Factor Priority
Car A 45.62%
Car B 05.11%
Car C 18.09%
Car D 15.04%
Car E 16.11%

c) STYLE

9 8 7 6 5 4 3 2 1 0 1 2 3 4 5 6 7 8 9
Car A Car B

Car A Car C

Car A Car D

Car A Car E

Car B Car C

Car B Car D
Car B Car E

Car C Car D

Car C Car E

Car D Car E

Factor Priority
Car A 09.60%
Car B 48.97%
Car C 19.11%
Car D 05.07%
Car E 17.22%

d) SERVICE

9 8 7 6 5 4 3 2 1 0 1 2 3 4 5 6 7 8 9
Car A Car B

Car A Car C

Car A Car D

Car A Car E

Car B Car C

Car B Car D

Car B Car E

Car C Car D

Car C Car E

Car D Car E

Factor Priority
Car A 0.141453436 14.14%
Car B 0.063513487 06.35%
Car C 0.448720617 44.87%
Car D 0.249360308 24.93%
Car E 0.096952152 09.69%
 e) MILEAGE

9 8 7 6 5 4 3 2 1 0 1 2 3 4 5 6 7 8 9
Car A Car B

Car A Car C

Car A Car D

Car A Car E

Car B Car C

Car B Car D

Car B Car E

Car C Car D

Car C Car E

Car D Car E

Factor Priority
Car A 0.423558395 42.35%
Car B 0.302726657 30.27%
Car C 0.11058789 11.05%
Car D 0.117669634 11.76%
Car E 0.045457424 04.54%

3. ANALYSIS

Multiplying all the priorities obtained from the judgements of decision alternatives with the
priority obtained from the judgements of criteria, we achieve the overall priority and total
the global priority. The resultant priority reflects that AHP gives the highest priority to Car
A and least priority to Car B.

Factor
Car A 0.36165439 36.16%
Car B 0.122779383 12.28%
 Car C 0.256394551 25.63%
Car D 0.125582454 12.55%
Car E 0.133589223 13.35%

The Car A, with a global priority of 0.3616, is the alternative that contributes the most to the
goal of choosing the best car for the college. The Car C is a close second, with a priority of
0.2563. The other alternatives have considerably less priority than these two i.e., Car A and
Car C. In descending order, they are Car E, Car D and Car B

4. CONCLUSION

The Analytical Hierarchical Process (AHP) has shown the college that Car A is the best
alternative which is satisfying all their criteria and judgements, followed closely by the
Car C. The other alternatives fall significantly short of meeting their criteria.
The next step is up to the management of college. They can just go out and buy Car A or
may use AHP to refine their decision between Car A and Car C.