AHP & ANP Theory

Analytic Hierarchical Process - AHP

The Analytic Hierarchy Process (AHP) is a theory developed by Thomas Saaty for measuring intangible factors through paired comparisons using judgments from a 1 to 9 fundamental scale and resulting in priorities for the factors.

It can be applied to both tangibles and intangibles and is used for decision making by structuring a hierarchical model with a goal, criteria (sub-criteria), and alternatives then making pairwise comparison judgments about the dominance of groups of elements in a level below with respect to the element from which they are connected in the level above. In the end the priorities of all the elements are synthesized to rank the alternatives. These simple hierarchies can be extended to multi-level decision models with hierarchies of benefits, opportunities, costs and risks. The AHP has been applied in many areas including resource allocation and conflict resolution.

There are numerous intangibles that have great impact that we must first measure before we can include them as variables. What is most significant is that intangibles can only be measured through expert judgment and only relative to the goals of concern in a particular situation.