Analytical Hierarchy Process Essay Example for Free

Analytical Hierarchy Process Essay abstractionThe analytic hierarchy process (AHP) provides a structure on ending-making processes where there ar a modified moments of choices but distributively(prenominal) has a number of attributes. This paper explores the using up of AHP for deciding on motorcar purchase. In the context of shopping, it is important to include elements that provide attributes that make consumer decision making easier, comfortable and therefore, bullock to a car purchase. As the car market becomes more competitive, there is a greater consume for revolution that provides better customer service and strategic competition in the business management. This paper presents a new modeological extension of the AHP by focusing on two issues. One combines brace sapiential comparison with a spreadsheet manner using a 5-point rating scale. The other applies the group weight to a reciprocal consistency ratio. Three newly formed car models of midsize argon app ly to show how the method allows choice to be prioritized and analyzed statistically.INTRODUCTIONThe Analytic Hierarchy Process (AHP) is a structured proficiency for helping people deal with complex decisions. Rather than prescribing a correct decision, the AHP helps people to determine one. establish on mathematics and human psychology, it was highly-developed by Thomas L. Saaty in the 1970s and has been extensively study and refined since then. The AHP provides a comprehensive and rational framework for structuring a problem, for matching and quantifying its elements, for relating those elements to overall goals, and for evaluating alternative solutions. It is used end-to-end the world in a wide variety of decision situations, in fields such as government, business, industry, healthc atomic number 18, and education.Users of the AHP first decompose their decision problem into a hierarchy of more easily comprehended sub-problems, apiece of which can be analyzed independently. Th e elements of the hierarchy can relate to any aspect of the decision problem. erst the hierarchy is built, the decision makers systematically evaluate its various elements, comparing them to one another in pairs. In making the comparisons, the decision makers can use concrete data about the elements, or they can use their judgments about the elements relative meaning and importance. It is the essence of the AHP that human judgments, and not just the underlying knowledge, can be used in performing the evaluations.The AHP converts these evaluations to numerical values that can be processed and compared over the full range of the problem. A numerical weight or priority is derived for each element of the hierarchy, allowing diverse and a great deal incomm-ensurable elements to be compared to one another in a rational and consistent way. This capability distinguishes the AHP from other decision making techniques. In the final step of the process, numerical priorities are derived for each of the decision alternatives. Since these numbers represent the alternatives relative ability to achieve the decision goal, they allow a straightforward consideration of the various courses of action. renderingFor instance lets consider cars (an example) which touch the lives of hundreds of millions of people nearly everywhere on this satellite on a daily basis. Other than a house, a car is perhaps the largest purchase that we make. With the medium cost of a car well over US$ 15,000, choosing just the right one becomes a major decision. Buying a new car is regarded as a decision-making problem and a comment of customer preference. Someone shops for a new car, he or she want to take a touch at finances and options. The possible budget is then a constraint in the decision on which car to buy. Most people shopping for a new car rank safety game among their purchase considerations.Other important attributes include fuel economy comfort and convenience features insurance inform ation specification and warranties and resale value. Constant changes in customer demands lead manufactures to produce new and improved inventions. Automation of manufacturing technologies allows this. lately the production life cycle has become shorter. For example, General Motors in the USA is leading the industry in developing ground-breaking technologies to improve the driving experience and to meet the changing needs and life styles of innovative drivers.They are making efforts to lower the cost of the technology to a direct that will make advanced cars an benignant purchase. As the automobile market becomes more competitive, the industry has no choice but to adopt innovation that brings better customer service. Many customers seek advice from car experts or friends when purchasing a car. In umpteen examples, there are sequences when the price and special features do not match the budget. An appropriate decision-making method for selecting the best car is useful to both customers and producers. An analytic method not only reduces the dealers burden, but excessively may gain salesThe analytic hierarchy process (AHP) is an intuitively easy method for formulating and analyzing decisions .It was developed to solve a specific class of problems that involves prioritization of potential alternate solutions. This is achieved by evaluation of a embed of criteria elements and sub-criteria elements through a series of pair wise comparisons.The AHP model depicted in this paper uses the quest decision criteria exterior, convenience, cognitive process, safety, economic aspect, dealer, and warranty as well as 39 sub-criteria. For the implementation of the AHP, we considered the three midsize rider car models as alternatives2. EVALUATION CRITERIAThe source for deriving the evaluation criteria candidate was1. A telephone discourse with dealers who are part of companies that make the models. The manufacturing company with the highest market share considered gr aceful physical structure styles and smart design of facilities link to safety to be most important. On the other hand, warranty on the car and the dealers strategies for selling are regarded as important customer criteria2. The use of personal experiences recorded on an online bulletin get along was corrected using the Internet The AHP model shown consists of three levels. Exterior involves components and factors seen from the outside such as color, duration and width, tyres, trunk, wheels, doors and headlamp styles. It includes the following sub-criteria model, style, length, quality of interior decoration, number of available color types, and instrument cluster.Convenience is related to to the design of the equipments for easy operation. It includes inside width, ease of loading or unloading packages, convenience of operating instruments, modern fittings (such as electronic systems and a burglar alarm), forward visibility and quality of the audio system. Performance is relat ed to the functioning of the car. It includes maximum torque, maximum speed, fuel tank capacity, braking ability, cornering ability, inside noises and traveling comforts. Safety is enhanced by a body designed to protect the drivers and passengers against collisions. The most important safety features are those that reduce the endangerment of death or serious injury. It includes airbags, antilock braking system ABS, impact protection systems, trunk safety, seat belts, safety of the body and number of alarm facilities. Airbags provide total chest and face protection. The ABS allows drivers full steering control and shorter fish fillet distance in adverse situations.The economic aspect refers to the price and cost of a new car, or of importtaining the car within budgets, etc. It includes purchasing prices, fuel consumption per month, insurance costs and installment conditions, resale prices of used cars and optional equipment costs. The dealer criterion refers to personal characteri stics and attitudes that lead the customer to make the purchasing decision. This criterion includes visits or calls needed to persuade the customer to buy, the dealers attitude, the dealers expertise and belief in the dealers promises. The warranty criterion include the number of service stations, ease of acquiring spare parts, customer satisfaction after services, and the average repair time for minor troubles.We mailed questionnaires to each of two groups. The first group was given a questionnaire that contained a pair wise comparison sheet. The members consisted of 13 managers who were serving in the sales department and who had experience exceeding 10 years (see Appendix A for this questionnaire). Respondents were domain experts who easily recognized their own sales products and have semiprecious knowledge about the customer requirements and preferences. Twenty-two potential customers with experience over 7 years were in the second group (see Appendix B). They answered about th eir satisfaction with their current car.3. Implementation and rankingA bit of prioritizing each car model is shown in remit 1 shows the C.R. for each individual, where the circle represents meaningful C.R. apply Expert Choice, we obtained the synthesized priorities of the main criteria and sub-criteria. The reason that the groups weight is 1/C.R. is to assign higher weights for higher consistent persons. As a result, safety gains are the highest priority in the main criteria. The body safety is especially important. The synthesized priorities and ranks resulted in Table 2 (Case-II). The priorities of the sub-criteria are not proportional to those of the main criteria. This meat the decision-makers have different opinions on the importance of the main criteria.By synthesizing the drivers rating values with the priorities, we obtain the priorities of the car models and the ranks with respect to the goal and synthesized priorities for each main criterion when the C.R. is bounded by the limit (see Table 3). In Case-I and Case-II, the computational methods used are reasonable when the groups consistency is more important than the individual ones. Because the conventional AHP has no choice but to increase the Delphi rounds in order to increase the groups consistency, much effort is required to reduce the C.R.If the Delphi rounds are not sufficiently processed, it is unreliable through the inclusion of inconsistent matrices 12. Using the Spearman rank correlation test 1, accepting H0 means that the ranks are either uncorrelated or negatively correlated. That is, two decision makers exhibit an insignificant level of agreement in ranking for each criterion. Rejecting H0 means that the ranks are positively correlated. As shown in Table 4, we conclude that there are significant effects between groups since the rate of the H0 acceptance is 83% (65/78 100). This shows that Case-I is the more appropriate method. It rejects greater agreement between groups.4. SENSITIVITY ANALYSISSensitivity analysis allowed us to verify the results of the decision. A sensitivity analysis can be formed to see how sensitive the alternatives are to change with the importance of the criteria. The Expert Choice implementation of AHP provides four graphical sensitivity analysis modes dynamic, gradient, performance and two-dimensional analysis 4. Here performance sensitivity analysis is employed. It depicts how well each alternative performs on each criterion by increasing or decreasing the importance of the criteria.In addition to this, each sub-criterion performs on each main criterion by increasing or decreasing the importance of the main criteria. It should be noted that if a criterion is not sensitive, it would be better to eliminate it from the AHP model. In the case of increasing importance of a criterion to the maximum value of 1.0, we assigned the alternative that gained the highest rank to tick off 5 and the lowest rank to score 1. The value of copy 1 is 25, M odel 2 is 21 and Model 3 is 15. In summary, we can conclude Model 1 is the best among the alternatives, although the highest priorities were different in Case-I and Case-II.5. CONCLUSIONThis paper presents a decision-making method for selecting the best passenger car models through combining the AHP and a spreadsheet model. The C.R. is used as the decision-makers weights. As an implementation of the AHP, three car models were prioritized. Through the sensitivity analysis, the fact that Model 1 ranked the highest is consistent with the result of the highest market share.ReferencesE.H. Forman, T.L. Saaty, M.A. Selly, R. Waldron, Expert Choice, Decision Support Software, McLean, VA, 1983T.L. Saaty, K. Kearns, Analytical formulation The Organization of Systems, Pergamon Press, Oxford, 1985.Y Wind and T L Saaty, Marketing Applications of Analytic Hierarchy Process, Management Science, Vol. 26, no. 7, July 1980