Operations Management For Competitive Advantage ninth edition 1

The AHP Method

 Multi Criteria Decision Making
 Most popular method
 AHP: Analytic Hierarchy Process
 Saaty 1975
 See www.expertchoice.com
 Has been used in Iceland for ranking power
plant alternatives by profitability and
environmental impact

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Operations Management For Competitive Advantage ninth edition 2

AHP
 1. Define all relevant criteria and do pairwise
comparison for importance => weights Wi
 2. Define all relevant alternatives and do
pairwise comparison against each criteria =>
scores Sij of each alternative for each
criteria
 3. Check for consistency, revise if necessary
 4. Calculate weighted final score Fi = sum(i:
Wi*Sij)
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Operations Management For Competitive Advantage ninth edition 3

The AHP comparison

 1 Equal
 3 Minor difference
 5 Certain difference
 7 Great difference
 9 Very great difference

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AHP Example: Locating an Aluminium

Smelter in Iceland
 Criteria:
– Labour, community and service
– Harbour, roads and infrastructure
– Power, closeness to a power plant
 Alternatives:
– Keilisnes
– Eyjafjörður
– Reyðarfjörður
 See Excel-document

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Operations Management For Competitive Advantage ninth edition 5

Dæmi um AHP aðferðina 3. Skref: Samkvæmni prófuð:

n= 3
1. Skref: Viðmið borin saman, tvö í senn => Vogtölur =>RI = 0,58

Samanburður: Normalíserað: Meðaltal =>

Byggð Höfn Orka Byggð Höfn Orka Vogtölur A*w' A*w'/w'
Byggð 1 1/4 1/5 Byggð 0,10 0,08 0,12 0,10 0,30 3,01
Höfn 4 1 1/2 Höfn 0,40 0,31 0,29 0,33 1,01 3,03
Orka 5 2 1 Orka 0,50 0,62 0,59 0,57 1,73 3,04
Sum: 10,00 3,25 1,70 1,00 1,00 1,00 1,00 M= 3,02
CI = 0,012
CI/RI= 0,021
Samkvæmni

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2. Skref: Valkostir bornir saman => Einkunnir

Byggð: Samanburður: Normalíserað: Meðaltal =>
Keilisnes Eyjafj Reyðarfj Keilisnes Eyjafj Reyðarfj Einkunn A*w' A*w'/w'
Keilisnes 1 3 5 Keilisnes 0,65 0,67 0,63 0,65 1,95 3,01
Eyjafj 1/3 1 2 Eyjafj 0,22 0,22 0,25 0,23 0,69 3,00
Reyðarfj 1/5 1/2 1 Reyðarfj 0,13 0,11 0,13 0,12 0,37 3,00
Sum: 1,53 4,50 8,00 1,00 1,00 1,00 1,00 M= 3,00
CI = 0,002
CI/RI= 0,003
Samkvæmni

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Höfn: Normalíserað: Meðaltal =>

Keilisnes Eyjafj Reyðarfj Keilisnes Eyjafj Reyðarfj Einkunn A*w' A*w'/w'
Keilisnes 1 1/3 1/2 Keilisnes 0,17 0,22 0,08 0,15 0,47 3,06
Eyjafj 3 1 5 Eyjafj 0,50 0,65 0,77 0,64 2,13 3,33
Reyðarfj 2 1/5 1 Reyðarfj 0,33 0,13 0,15 0,21 0,64 3,11
Sum: 6,00 1,53 6,50 1,00 1,00 1,00 1,00 M= 3,17
CI = 0,084
CI/RI= 0,144
Ósamkvæmni
Orka: Samanburður: Normalíserað: Meðaltal =>
Keilisnes Eyjafj Reyðarfj Keilisnes Eyjafj Reyðarfj Einkunn A*w' A*w'/w'
Keilisnes 1 1/3 1/7 Keilisnes 0,09 0,05 0,11 0,08 0,25 3,01
Eyjafj 3 1 1/5 Eyjafj 0,27 0,16 0,15 0,19 0,59 3,04
Reyðarfj 7 5 1 Reyðarfj 0,64 0,79 0,74 0,72 2,27 3,14
Sum: 11,00 6,33 1,34 1,00 1,00 1,00 1,00 M= 3,07
CI = 0,033
CI/RI= 0,057
Samkvæmni

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4. Skref: Heildareinkunn reiknuð:

Byggð: Höfn: Orka: Heildar

0,10 0,33 0,57 Einkunn
Keilisnes 0,65 0,15 0,08 0,16
Eyjafjörður 0,23 0,64 0,19 0,35
Reyðarfjörður 0,12 0,21 0,72 0,49

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