Analytic Hierarchy Process AHP - Business Performance Management
AHP stands for Analytic Hierarchy Process. It is a multi-criteria decision making method, originally developed by Prof. Thomas L. Saaty. AHP derives ratio scales from paired comparisons of criteria, and allows for some small inconsistencies in judgments.
Inputs can be actual measurements, but also subjective opinions. As a result, ratio scales (weightings) and a consistency index will be calculated. For decision making with multiple inputs from different stakeholders, the geometric mean of individual inputs is used.
Mathematically the method is based on the solution of an Eigen value problem. The results of the pair-wise comparisons are arranged in a matrix. The first normalized Eigen vector of the matrix gives the ratio scale (weighting), the largest Eigen value determines the consistency ratio.
An excel sheet, doing the calculation for up to 8 criteria is available from the author.
AHP can be applied in many fields, Evaluation of product features, Cost-Benefit Analysis, Strategy development, Selection of Key Performance Indicators, Deriving weights for a combined performance index, Deriving a consolidated scale of importance from different inputs.
Пікірлер: 148
I'm so grateful watching this video, Mr. Klaus. Thank you so much, some literatures and journals have made me confused.
Amazing! Wonderful step by step tutorial. Thank you so much!
I didn't have to look for another source after watching this video, be blessed Sir
Thank's a lot Mr. Klaus. It is so helpful to understand AHP.
Fabulous video Mr. Klaus! It helped me and my team a lot!
Thank for sharing Mr. Klaus, have a good life!
Thank you very much! Great explanation and video. Also, thanks for your online tool. It's awesome and concise!!
understood it very well - simple graphics, effective teaching. please make more videos !
this is the best video to understand the whole AHP process
Excellent video and step by step cleared out everything. Thank you
Very well explained. Thanks Klaus!
Thanks a lot, i'm going to use AHP in my graduation project in risk management.. your video is simple and easy to follow. i'll let you know how things will end with me.
Excellent video. Thank you, Sir.
Very good explanation, this seems like a very useful practical tool for making rational decisions.
Thank you very much! it helps me! Hello from Timor-Leste
Danke sehr! Sie retten mir meine Klausur!
Amazing explanation, thank you.
the most useful tools for decision making, many thanks
thanks for such wonderful explanation
A very concise and wonderful explanation
Thank you very much sir, you are an excellent teacher..
Very nice explanation. Thank you sir :)
Wonderful explanation of AHP - thank you Klaus!
@maximiliantommy1839
2 жыл бұрын
i know Im kind of randomly asking but do anyone know a good website to watch newly released movies online?
very useful , thank you so much
Wow you save my reading time. Thanks a million.
Great video!
This is by far the best explanation of AHP, thank you so very much!
Very well explained.
Thank you for a nice explanation
Very understandable intro thanks!
Super duper explanation.
Very good & explanatory video....Thank You... :)
Big Thank you. very useful.
so great! and help me to learn~ Thx a lot!
exactly what i needed
Awesome! thanks a bunch
Thanks for this
You have to multiply the "local" priorities with the priorities one category (level) higher in the hierarchy, in order to get the "global" priorities. Example: pink = 13% * color = 17% = 2.2%
Excellent clip , I highly appreciate if you could elaborate more on how to relate AHP to financial parameters such as Net present value (NPV) or internal rate of return (IRR)?
nice! thank you for this :)
Thank you!
finally i knew what is gona on in this methodology!
Thank you so much sir
Can we use Likert Scale for Analytical Hierarchy Process to obtain weights?
Great explanation, thank you
@klausg3614
8 жыл бұрын
Alternative evaluation can be done using pairwise comparisons (decision matrix) or using any other methods,
Thank you so much
Thank you very much
thanks, now I've understand :)
thank you
thank you very much sir! :)
Thank's a lot . learn something new
very nice
Thanks helpful video
Thank you sir
Praise Klaus, thank you.
Hello! I didnt understand how have you calculated the weight 17,43 and 40
ANP is more general than AHP and also complex. I still need some study to fully understand, and find a way to present the essentials. Will take time, but plan to upload once it's done.
Is it possible to write down the literature which you used for the video? Thank you very much for the explanation!!!
thanks master
Respected sir, I want to use AHP on my research work but I am little confused about its application. Actually I am working on inspection skill of human labour and factors affecting on it. And I want to use AHP to classify the available manpower into three skill levels (Low, Medium, and High) based on the factors that can affect the skill of quality inspectors. Plz guide me can i use AHP for this purpose? if yes then plz give your valuable suggestions and useful material that can be helpful for me to solve my problem.
Yes, you are right. The correct numbers are 16.9%, 44.3% and 38.7% (color, memory, delivery), 13.6%, 9.8%, 4.3%, 26.5% and 45.8% (colors), 4%, 9.5%, 41.7% and 44.8% for memory and 48.1%, 40.5%, 11.4% for delivery. The first version of my excel template (April 2010) was not very accurate with the power method, sorry. Inbetween the template is very precise and correct. You can get it from my website bpmsg dot com. A new version with 10 criteria will be released soon.
Sir what sub criteria u taken for delivery... If delivery time takes then more %will came... Then what should i do.... Which is best ???
Hi, thank you for an excellent video! If i want to learn more of how to use AHP in marketing research, where is the best place to search? :)
Thank you so much for this wonderful tutorial. Please, I want to use AHP for risk assessment, any idea of the materials I can use for quick reference? Thanks.
@klausg3614
7 жыл бұрын
Have a look on my website. There is some material about AHP, as well as a free online AHP software to play around with: bpmsg dot com
Is it possible to upload a complete template to illustrate your video? I have tried to enter the numbers you used and am getting slightly different results. For instance, while you demonstrate values of 17%, 43%, and 40% weights for the color, memory, and delivery criterion, respectively. ... I obtain 16.9%, 44.3%, and 38.7%. A completed model may help me better understand you input method and results. Thanks much for you contribution to this interesting topic (AHP).
A good review about AHP can be found in "Review of the main developments in the Analytic Hierarchy Process" from Alessio Ishizaka and Ashraf Labib
Please sir, can I have the link of where to download the Excel sheet to compute the normalized principal Eigenvector of the matrix. Thank you so much.
@BPMSG
5 жыл бұрын
bpmsg.com under tools. ahp.bpmsg.com is a free AHP online software for more complex projects.
Very nice video. I have only one question. How this method works when we have sub-categories? For example the appearance of a cell phone may include: colour, size and other factors.
@BPMSG
Жыл бұрын
Use AHP-OS free online software to define hierarchies: https:bpmsg.com/ahp/
Thank you so much for this video. would you like to share an example only with criteria?
@BPMSG
5 жыл бұрын
You can check my website with the (free) AHP online software. There you find a couple of examples. bpmsg.com/academic/ahp.php
Thank you for the video but I am yet to understand how to input the answers gotten from the respondents. In a situation where I have over 100 respondents, what is the way to go?
@BPMSG
4 жыл бұрын
Have a look at bpmsg.com/ahp . There you find an AHP online calculator and the free AHP online SW for more than 1 participant. You will see, how the decision matrix is filled with the judgment values. For consolidation of more than one participant I am using the geometric mean - Aggregation of individual judgments (AIJ). All mathematical relations are shown in my published paper: doi.org/10.13033/ijahp.v10i3.590
Hat tip to Mr. klaus for erudite lecture on AHP
Thanks, it was a very good explanation. But I have an interesting question, At 4:30, I expected 1.5 when comparing memory and delivery which make the above criteria consistent. However, a "1" was given, is the third parameter free from the first two??
@klausg3614
6 жыл бұрын
Yes, 1.5 would have been the consistent answer, but people are not always consistent. With AHP you get information about inconsistency. There is redundancy when making all pairwise comparisons.
@dicksang2
6 жыл бұрын
Thanks Klaus! Very clear with your explanation! :) Cheers!
hello i want to ask how you get the weights of sub criteria from main criteria as you have told at 6.16
@afmarahman
7 жыл бұрын
17% = 17/100 =.17 13% = 13/100 = .13 .17 X .13 = .02 which is 2.2%
@zibusisontini3812
6 жыл бұрын
Sir, How did you arrive to the 17% Please assist. I tried to input in the tools as directed but with no luck.
Thank you for your clear explanation. I have a doubt: I noticed that in many cases AHP is used for defining sub-criteria priority even though they are already "numerical". EG, In the example you did, the "memory" criteria is already numerical: an option could be to normalize those values in some mathematical way (linear, log, etc) and then use these vector instead of apply AHP. Of course, in this case, I mean that the user of the example think that there is no real difference between 32 or 64 MB, but in this case there were only 4 alternatives. In many application there are a lot of alternatives (for example, if applied in a raster image), so pairwaise comparison would be impossible to do. In many cases I saw AHP application on numerical criteria which are actually far more complex than use the original data (once normalized, of course). Don't you think that in many cases AHP is misunderstood? It seems to me that the strenght of this method is its simplicity, but in many cases people like to complicate their lives! Thanks again for your video and for your site too.
@BPMSG
5 жыл бұрын
You are right, it is also possible to use numerical values on a ratio scale instead of doing the pairwise comparisons, and it is done in AHP projects. My example just illustrates that the perceived value of memory could be different from the numerical ratios for a decision maker. Anyway, you run into problems with AHP if the number of alternatives exceeds 7 +/- 2. If you have a lot of alternatives, you can use AHP for the criteria weights only, and combine with another method for alternative evaluation, for example it could be a simple rating table.
@leomadvr
5 жыл бұрын
Perfectly clear, thanks for your point. I saw many AHP projects where there are some confusion about the real aim of the method and how to use it and that leaded to misleading results. I think that AHP is a flexible option to make your choise easier, but in some case is used in a very rigid way and make things really complicated. So thanks again for the useful example of the video and for your comment. Best regards.
Where is the mentioned Excel sheet? (4:56) Can you post it, please?
@BPMSG
7 жыл бұрын
Check bpmsg.com under tools.
@ThalysFeitosa
7 жыл бұрын
Thank you so much .
Show!!
Hello, could you please tell us the matrix values that you entered for the memory and delivery sub-criteria? I have written a program that uses the AHP and I would like to test it using your values. Thank you!
@BPMSG
10 жыл бұрын
You could find the details on my website. bpmsg.com/academic/ahp-group.php?sc=expl02
@quicksilver455
10 жыл бұрын
BPMSG But that only has the final percentage values. Could you please give us the square matrix values (like at time 6:00 in the video, but for memory and delivery)? Thank you so much!
@BPMSG
10 жыл бұрын
Annjalie123 I posted all input data here: bpmsg.com/ahp-youtube-video-example-matrix-values-and-priority-vectors/
@quicksilver455
10 жыл бұрын
BPMSG Thank you so much!!
Hi professor. Firstly, thank you very much for the video. I have a question. Should we calculate consistency for each sub-criteria?
@BPMSG
4 жыл бұрын
Consistency is calculated for each set of pairwise comparisons (main criteria + subcriteria)
@turalgojayev3971
4 жыл бұрын
@@BPMSG Thank you very much for the answer, professor.
tq brother, how you get the percentage for pink= 2.2 %, blue = 2 % green = 0.9 % and so forth..Tq very much
hi, where can I find the excel sheet? but thank you so much for the video. It is really helpful
@BPMSG
2 жыл бұрын
bpmsg.com/new-ahp-excel-template-with-multiple-inputs/
@BPMSG
2 жыл бұрын
bpmsg.com/ahp is free online software
if there is equal importance on the criteria then how will i calculate? please inform me
@klausg3614
6 жыл бұрын
sweety shahinur : then a “1” will be put into the decision matrix.
How did you calculate the relative cost in %?
@BPMSG
5 жыл бұрын
Total costs of all alternatives are 120 +120 +150 +150 =540. Rel. cost for model of 120 = 120/540 = 22%
@GeeJamz
5 жыл бұрын
Thank you so much
thanks you so much, Can i get the calculation for up to 8 ?
@BPMSG
5 жыл бұрын
Please check my website bpmsg.com There is an AHP excel template for download and a free AHP online software
Hello, is it possible to run SEM for factors found by AHP?
@BPMSG
10 жыл бұрын
I don't know enough about SEM (you mean simultaneous equations models or structural equation modeling?), sorry.
@BPMSG
10 жыл бұрын
Sorry, don't know enough about it to answer your question. (SEM = structural equation modeling or simultaneous equations models?)
@naser19851985
10 жыл бұрын
BPMSG Yes, I meant Structural Equation Modeling.
@IhwanGhazali
10 жыл бұрын
naser19851985 yes it can bro..some journals are available to combine SEM and AHP.
I do not understand the basic principals of this tecnique. First we assume linear relationships between all criterias at the beginning. And then we give some value for all raitos of pairs. However from mathematical point of view, it is impossible to give ratio to all of them. For example, at the 4:32, we assumed that memory is three times and delivery is two times more important than color. But since we assume a simple linear relationship between all pairs, we can calculate the memory/delivery ratio as 3/2. How come we can assume that memory and delivery has the same importance in this case?
@klausg3614
6 жыл бұрын
Where do we assume linear relationships between all criteria?
@klausg3614
6 жыл бұрын
AHP allows inconsistency in judgments. It’s measured with the consistency ratio CR. The method works with “near consistent” matrices only, I.e. CR < 10%. Read the original paper from Saaty.
@utkucemkarabulut8215
6 жыл бұрын
Assuming that the ratio of importances is a constant value is the same thing as linear relationship. I can understand that sometimes it is impossible to make accurate measurements especially in social sciences and important to allow some uncertainties but 33% (1 instead of 1.5) is too much. More importantly, does the method say anithing about errors or uncertainties?
@klausg3614
6 жыл бұрын
Most users of AHP do not consider uncertainties, just inconsistencies. My software implementation gives uncertainty estimations due to rounding, e.g. 1 and 1.5
@utkucemkarabulut8215
6 жыл бұрын
Ok. Thank you for quick replies. But my problem is simply related to pure mathematics behind it. What AHP does, as far as i understand, is to transform a desicion making problem to a linear eigen value problem at first. But when defining a 'ratio of importance matrix' some ratios can be easily calculated from the previous ones (again since we are interested in a linear problem). Only thing i'm having hard time is that point.
The latest update of my AHP excel template with improved accuracy is now available for download from my website bpmsg dot com
Likert scale can not be used for the pair wise comparisons. You need to use the rational AHP scale 9 ... 1 ... 1/9
@kanyaratphudphad5635
8 жыл бұрын
+Klaus G Can i use scale >>> 1 2 3 4 5 for questionnaire ?
@BPMSG
8 жыл бұрын
+Kanyarat Phudphad You could map 1 2 3 4 5 to the AHP scale 1 3 5 7 9. Important is that your questions are pairwise comparisons, i.e. "what is more important, A or B, on a scale 1 to 9 (in your case 1 to 5)
@kanyaratphudphad5635
8 жыл бұрын
Thank you so much. can you recommend AHP book?
@BPMSG
8 жыл бұрын
+Kanyarat Phudphad One of the latest from Saaty is Mathematical Principals of Decision Making. Its available from Amazon.
@kanyaratphudphad5635
8 жыл бұрын
Thank you so much
Where is the Excel sheet?
@BPMSG
2 жыл бұрын
bpmsg.com/new-ahp-excel-template-with-multiple-inputs/
A new AHP excel template with multiple input is now available on mye website bpmsg.com
4:55
Wow, a 64 MB smartphone. Imagine that.
Goodmorning! BPMSG Can you help me. Do you have a sample program for AHP (Analytical Hierarchy Process) that can help for my study. Thank you in Adnvance.
@BPMSG
10 жыл бұрын
Sharmaine Garcia Go to my website bpmsg.com. There you can find an online software and a lot of information about AHP
@sharmainegarcia8662
10 жыл бұрын
BPMSG Sir Can I get the source code? To know the implementation of the Algo.
@BPMSG
10 жыл бұрын
The excel template can be unprotected w/o password. You can see all formula. My AHP online software is not open source, but all mathematical relationships are shown in the manual (you can download from my website) Regards, Klaus
@sharmainegarcia8662
10 жыл бұрын
Thank you po Sir! :)
Get the latest information, templates and updates from my blog bpmsg .com
I don't know a specific address to find something abt AHP and marketing. Just google. There is one free online journal on AHP. IJAHP.org. Maybe you find something there.
Still don't get it
Check out my free tools on bpmsg.com
Great explanation, concise and clear, Thanks a lot