Analytical Hierarchy Process
Genre: Accounting

Describe analytical technique ?

About the Book

Analytical Hierarchy Process

Analytical Hierarchy Process is a technique used for taking very difficult decisions . Analytical Hierarchy Process is used all around the world in many fields like Eductaion,Business and many other fields When they take complex decisions than Analytical Hierarchy Process is used .With Analytical Hierarchy  technique they find the best decision according to there goals.

1. Describe analytical hierarchy technique?

When there is more than one system configuration available for implementation, deciding which configuration to select becomes a crucial task. Such decisions are very important as it may largely affect the process of implementation. Appropriate selection of configuration may be very difficult in large systems because of the number of subsystems and basic components available. Some techniques are available to assist such decision making. For this purpose tools like AHP are available (Borovitis & Neumann, 1979).

The analytical hierarchy technique helps to divide the problem into a hierarchy of problems which can be more easily evaluated. The technique can be explained as below;

? The problem is decomposed into a series of goal, criteria, sub criteria, and alternatives. This constitutes a hierarchy in which elements of one level are related to elements of another element below it which percolates down to the lowest level. Two processes are linked in such a way so as to make comparisons possible.comparisons as equal, marginally strong, strong and very strong.

? Data are collected from experts corresponding to hierarchy structure. Experts range these

? The pair wise comparisons that are obtained are organized into a square matrix.

? The principal eigen value and corresponding normalized Eigen vector of comparison matrix

? Consistency of order n is evaluated. Consistency is ensured by redundancy of this method.

? Ratings obtained for each alternative is multiplied by the weights of sub criteria and local provides relative importance of various criterions being compared. Consistency index is calculated in this method.ratings with respect to each criterion is calculated. These local rating are multiplied with weights of criteria to get global ratings.

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