Analytic Hierarchy Process - Uses and Applications

Uses and Applications

While it can be used by individuals working on straightforward decisions, the Analytic Hierarchy Process (AHP) is most useful where teams of people are working on complex problems, especially those with high stakes, involving human perceptions and judgments, whose resolutions have long-term repercussions. It has unique advantages when important elements of the decision are difficult to quantify or compare, or where communication among team members is impeded by their different specializations, terminologies, or perspectives.

Decision situations to which the AHP can be applied include:

• Choice - The selection of one alternative from a given set of alternatives, usually where there are multiple decision criteria involved.
• Ranking - Putting a set of alternatives in order from most to least desirable
• Prioritization - Determining the relative merit of members of a set of alternatives, as opposed to selecting a single one or merely ranking them
• Resource allocation - Apportioning resources among a set of alternatives
• Benchmarking - Comparing the processes in one's own organization with those of other best-of-breed organizations
• Quality management - Dealing with the multidimensional aspects of quality and quality improvement
• Conflict resolution - Settling disputes between parties with apparently incompatible goals or positions

The applications of AHP to complex decision situations have numbered in the thousands, and have produced extensive results in problems involving planning, resource allocation, priority setting, and selection among alternatives. Other areas have included forecasting, total quality management, business process re-engineering, quality function deployment, and the balanced scorecard. Many AHP applications are never reported to the world at large, because they take place at high levels of large organizations where security and privacy considerations prohibit their disclosure. But some uses of AHP are discussed in the literature. Recently these have included:

• Deciding how best to reduce the impact of global climate change (Fondazione Eni Enrico Mattei)
• Quantifying the overall quality of software systems (Microsoft Corporation)
• Selecting university faculty (Bloomsburg University of Pennsylvania)
• Deciding where to locate offshore manufacturing plants (University of Cambridge)
• Assessing risk in operating cross-country petroleum pipelines (American Society of Civil Engineers)
• Deciding how best to manage U.S. watersheds (U.S. Department of Agriculture)

AHP is sometimes used in designing highly specific procedures for particular situations, such as the rating of buildings by historic significance. It was recently applied to a project that uses video footage to assess the condition of highways in Virginia. Highway engineers first used it to determine the optimum scope of the project, then to justify its budget to lawmakers.