4 ECONOMICS

Linlin Shan
Wenyu Teng
K.M.Nafiul
Haque

Applications of the AHP

Choice of country for business expansion
Reducing tensions among ASEAN countries
Making Regional economic development decisions
Evaluation of countries to attract FDIs
Evaluating market attractiveness

Hierarchy for choosing the most

suitable international market

Priorities of the ratings

Priorities of the ratings

Resolving tensions among ASEAN countries

There are two hierarchies of the proposed model
ASEAN
Developed Countries

Hierarchy to find out favorable global

trade and economy (ASEAN perspective)

Hierarchy to find favorable global trade and

economy strategies (Developed Countries
perspective)

ASEAN Countries Targets

1. Market
2. Growth
3. Efficiency
4.Stable

Developed countries (DCs)

Targets
1.Market
2.Fair treatment
3.Value
4.Resource

Case 3 - Marketing Regional Economic

Development Decisions

Hierarchy to prioritize sectors for regional economic development

Conti-Case 3 - Marketing Regional

Economic Development Decisions

Hierarchy for regional development plan for the state of Virginia, USA

Conti-Case 3 - Marketing Regional

Economic Development Decisions

Overall weights of the sectors=

the rating priority *the

criterion priority against

Case 4 Determining Attractiveness of

countries for Foreign Direct Investment (FDI)

Hierarchy that depicts a European model for determining market attrativeness

Case 4 Determining Attractiveness of

countries for Foreign Direct Investment (FDI)

Transition Countries' ratings=

total of the rating * the priority
of the lowest level criteria

Evaluating Market
Attractiveness

A formidable four nation consortium

Choose a suitable market

Ownership Advantage
Location Advantage
Internationalization Advantage

AHP Hierarchy
The four nation consortium is threatening the
domination of market by Boeing Aircraft.
Politics
Intense Competition
Market Growth
Market Size

Objective: Finding the best

market

Overview of the AHP

1. Set up decision hierarchy
2. Make pairwise comparisons of attributes and
alternatives
3. Transform comparisons into weights and check
consistency
4. Use weights to obtain scores for options
5. Carry out sensitivity analysis

20

Typical Application Areas

Resource Allocation
Hiring, evaluating and promoting
employees
Strategic planning
Relocation decisions
Vendor selection
Evaluating mergers and acquisitions
21

AHP is basically composed of these:

Determine the relative weights of the decision criteria
and determine the relative rankings of alternatives.
Both qualitative and quantitative information can be
compared by using informed judgments to derive
weights and priorities.

QUESTIONS?

THANK YOU!