Mazda Omintro

DIT 1141: OPERATIONS MANAGEMENTDIT 1141: OPERATIONS MANAGEMENT

DEPARTMENT OF DECISION AND DEPARTMENT OF DECISION AND INFORMATION TECHNOLOGIESINFORMATION TECHNOLOGIES

COLLEGE OF COMMERCE AND FINANCECOLLEGE OF COMMERCE AND FINANCE

VILLANOVA UNIVERSITYVILLANOVA UNIVERSITY

INTRODUCTIONINTRODUCTION


Operations management is the process of obtaining Operations management is the process of obtaining and utilizing resources to produce useful goods and utilizing resources to produce useful goods and services so as to meet the goals of the and services so as to meet the goals of the organization.organization.


Production management is concerned with the Production management is concerned with the manufacturing of goods:manufacturing of goods:

Examples of goods:Examples of goods:

carscars

booksbooks

chairschairs

computerscomputers

houseshouses

etc.etc.


Operations management is also concerned with the Operations management is also concerned with the management of service industries as well as the management of service industries as well as the manufacturing of goods.manufacturing of goods.


Examples of services:Examples of services:

retailing/foodretailing/food

bankingbanking

educationeducation

health carehealth care

utilitiesutilities

insuranceinsurance

government agenciesgovernment agencies

etc.etc.

OVERVIEW OF OPERATIONS OVERVIEW OF OPERATIONS MANAGEMENT MODELMANAGEMENT MODEL

TransformationTransformation ProcessProcess

OutputOutput

Goods orGoods orServicesServices

ControlControl

Input: resourcesInput: resources raw materialsraw materials machinesmachines personnelpersonnel capitalcapital land/buildingsland/buildings utilitiesutilities informationinformation etc.etc.

OVERVIEW OF OPERATIONS OVERVIEW OF OPERATIONS MANAGEMENT MODELMANAGEMENT MODEL

Operations management considers Operations management considers howhow the input are the input are transformed into goods or services.transformed into goods or services.

Control is when something is learned about the Control is when something is learned about the goods or services that is used to more effectively goods or services that is used to more effectively transform future goods or services.transform future goods or services.

EXAMPLE OF OPERATIONS EXAMPLE OF OPERATIONS MANAGEMENT PROCESSMANAGEMENT PROCESS

Automobile factoryAutomobile factory

Input



Input

steel, plastic

glass, paint

tools

equipment

machines

personnel, buildings

utilities, etc.



Input

steel, plastic

glass, paint

tools Transformation

equipment process

machines


utilities, etc.



InputOutput

steel, plastic

glass, paint


equipment process

machines


utilities, etc.



InputOutput

steel, plastic Car

glass, paint


equipment process

machines


utilities, etc.

OPERATIONS MANAGEMENT OPERATIONS MANAGEMENT QUESTIONSQUESTIONS

1. How many items will be demanded next month?1. How many items will be demanded next month?

2. How many items should be produced next month?2. How many items should be produced next month?

3. How many workers are needed to satisfy the 3. How many workers are needed to satisfy the proposed production level?proposed production level?

OPERATIONS MANAGEMENT OPERATIONS MANAGEMENT QUESTIONSQUESTIONS

4. If a plant is built, how should the activities be 4. If a plant is built, how should the activities be scheduled so that the project is completed on time, scheduled so that the project is completed on time, within budget, and with acceptable quality?within budget, and with acceptable quality?

5. How is the quality of our output measured and 5. How is the quality of our output measured and how is it improved?how is it improved?

6. If tires are needed, how many should be ordered?6. If tires are needed, how many should be ordered?


HospitalHospital

InputInput


HospitalHospital

InputInput

patients, doctorspatients, doctors

nurses, drugsnurses, drugs

bedsbeds

building building

medical equipment medical equipment

support staff, computerssupport staff, computers

utilities, etc.utilities, etc.


HospitalHospital

InputInput


nurses, drugsnurses, drugs Transformation Transformation

bedsbeds Process Process

building building





HospitalHospital

InputInput OutputOutput




building building





HospitalHospital


patients, doctorspatients, doctors A treated A treated patientpatient



building building





UniversityUniversity

InputInput



InputInput

students, professorsstudents, professors

secretariessecretaries



InputInput


secretaries, drugssecretaries, drugs



InputInput


secretaries, lab equipmentsecretaries, lab equipment

dormitoriesdormitories

staff, computers staff, computers

buildingsbuildings

etc.etc.



InputInput


secretaries, lab equipmentsecretaries, lab equipment


staff, computers Transformationstaff, computers Transformation

buildings buildings processprocess

etc.etc.





secretaries, lab equipment secretaries, lab equipment




etc.etc.




students, professorsstudents, professors A more highly A more highly

secretaries, lab equipment secretaries, lab equipment educated educated

dormitoriesdormitories student student



etc.etc.

DECISION MAKING IN DECISION MAKING IN OPERATIONS: OPERATIONS:

THE ANALYTIC THE ANALYTIC HIERARCHY PROCESSHIERARCHY PROCESS

What is the Analytic Hierarchy Process (AHP)?What is the Analytic Hierarchy Process (AHP)?

The AHP, developed by Tom Saaty, is a decision-The AHP, developed by Tom Saaty, is a decision-making method for prioritizing alternatives when making method for prioritizing alternatives when multi-criteria must be considered.multi-criteria must be considered.

An approach for structuring a problem as a hierarchy An approach for structuring a problem as a hierarchy or set of integrated levels.or set of integrated levels.


AHP problems are structured in at least three levels:AHP problems are structured in at least three levels:

The goalThe goal, such as selecting the best car to purchase,, such as selecting the best car to purchase,

The criteriaThe criteria, such as cost, safety, and appearance,, such as cost, safety, and appearance,

The alternativesThe alternatives, namely the cars themselves., namely the cars themselves.


The decision-maker:The decision-maker:

measures the extent to which each measures the extent to which each alternative achieves each criterion, and alternative achieves each criterion, and

determines the relative importance of the determines the relative importance of the criteria in meeting the goal, and criteria in meeting the goal, and

synthesizes the results to determine the synthesizes the results to determine the relative importance of the alternatives in relative importance of the alternatives in meeting the goal.meeting the goal.


APPROACHAPPROACH

How does AHP capture human judgments?How does AHP capture human judgments?

AHP AHP nevernever requires you to make an absolute requires you to make an absolute judgment or assessment. You would never be judgment or assessment. You would never be asked to directly estimate the weight of a stone in asked to directly estimate the weight of a stone in kilograms.kilograms.

AHP AHP doesdoes require you to make a relative assessment require you to make a relative assessment between between twotwo items at a time. AHP uses a ratio items at a time. AHP uses a ratio scale of measurement. scale of measurement.

APPROACHAPPROACHSuppose the weights of two stones are being Suppose the weights of two stones are being

assessed. AHP would ask: How much heavier (or assessed. AHP would ask: How much heavier (or lighter) is stone A compared to stone B?lighter) is stone A compared to stone B?

AHP might tell us that, of the total weight of stones AHP might tell us that, of the total weight of stones A and B, stone A has 65% of the total weight, A and B, stone A has 65% of the total weight, whereas, stone B has 35% of the total weight.whereas, stone B has 35% of the total weight.

APPROACHAPPROACHIndividual AHP judgments are called Individual AHP judgments are called pairwise pairwise

comparisonscomparisons..

These judgments can be based on objective or These judgments can be based on objective or subjective information.subjective information.

For example, smoothness might be a subjective For example, smoothness might be a subjective criterion used to compare two stones. Pairwise criterion used to compare two stones. Pairwise comparisons could be based on touch. comparisons could be based on touch.

APPROACHAPPROACHHowever, suppose stone A is a diamond worth However, suppose stone A is a diamond worth

$1,000.00 and stone B is a ruby worth $300.00.$1,000.00 and stone B is a ruby worth $300.00.

This objective information could be used as a basis This objective information could be used as a basis for a pairwise comparison based on the value of for a pairwise comparison based on the value of the stones.the stones.

APPROACHAPPROACHConsistency of judgments can also be measured. Consistency of judgments can also be measured.

Consistency is important when three or more Consistency is important when three or more items are being compared. items are being compared.

Suppose we judge a basketball to be twice as large as Suppose we judge a basketball to be twice as large as a soccer ball and a soccer ball to be three times as a soccer ball and a soccer ball to be three times as large as a softball. large as a softball.

To be perfectly consistent, a basketball must be six To be perfectly consistent, a basketball must be six times as large as a softball.times as large as a softball.

APPROACHAPPROACH

AHP does not require perfect consistency, however, AHP does not require perfect consistency, however, it does provide a measure of consistency. it does provide a measure of consistency.

We will discuss consistency in more detail later.We will discuss consistency in more detail later.

AHP APPLICATIONSAHP APPLICATIONS

AHP has been successfully applied to a variety of AHP has been successfully applied to a variety of problems.problems.

1.1. R&D projects and research papers;R&D projects and research papers;

2.2. vendors, transport carriers, and site locations;vendors, transport carriers, and site locations;

3.3. employee appraisal and salary increases;employee appraisal and salary increases;

4.4. product formulation and pharmaceutical licensing;product formulation and pharmaceutical licensing;

5.5. capital budgeting and strategic planning;capital budgeting and strategic planning;

6.6. surgical residents, medical treatment, and surgical residents, medical treatment, and diagnostic testing.diagnostic testing.


The product and service evaluations prepared by The product and service evaluations prepared by consumer testing services is another potential consumer testing services is another potential application.application.

Products and services, such as self propelled lawn Products and services, such as self propelled lawn mowers are evaluated. mowers are evaluated.

Factors include: bagging, mulching, discharging, Factors include: bagging, mulching, discharging, handling, and ease of use.handling, and ease of use.

An overall score for each mower is determined.An overall score for each mower is determined.


Would you make your purchasing decision based Would you make your purchasing decision based solely on this score?solely on this score?

Probably not! Some of the information will be Probably not! Some of the information will be helpful. helpful.

Some additional questions are:Some additional questions are:

How important is each criterion?How important is each criterion?

Would you weigh the criteria the same way?Would you weigh the criteria the same way?

Are all of the criteria considered important to you?Are all of the criteria considered important to you?

Are there other criteria that are important to you?Are there other criteria that are important to you?

Have you ever thought about these issues?Have you ever thought about these issues?

RANKING SPORTS RECORDSRANKING SPORTS RECORDS

The AHP has been used to rank outstanding season, The AHP has been used to rank outstanding season, career, and single event records across sports.career, and single event records across sports.

SeasonSeason

1.1. Babe Ruth, 1920: .847 slugging averageBabe Ruth, 1920: .847 slugging average

2.2. Joe DiMaggio, 1944: 56 game hitting streakJoe DiMaggio, 1944: 56 game hitting streak

3.3. Wilt Chamberlain, 1961-62: 50.4 points per game Wilt Chamberlain, 1961-62: 50.4 points per game scoring averagescoring average

RANKING SPORTS RECORDSRANKING SPORTS RECORDSCareerCareer

1.1. Johnny Unitas, 1956-70: touchdown passes in 47 Johnny Unitas, 1956-70: touchdown passes in 47 consecutive gamesconsecutive games

2.2. Babe Ruth, 1914-35: .690 slugging averageBabe Ruth, 1914-35: .690 slugging average

3.3. Walter Payton, 1975-86: 16,193 rushing yardageWalter Payton, 1975-86: 16,193 rushing yardage

Single eventSingle event

1.1. Wilt Chamberlain, 1962: 100 points scoredWilt Chamberlain, 1962: 100 points scored

2.2. Norm Van Brocklin, 1951: 554 passing yardsNorm Van Brocklin, 1951: 554 passing yards

3.3. Bob Beamon, 1968: 29' 2.5" long jumpBob Beamon, 1968: 29' 2.5" long jump

RANKING SPORTS RECORDSRANKING SPORTS RECORDSHow do we compare records from different sports?How do we compare records from different sports?

It all depends on the criteria that you select!It all depends on the criteria that you select!

Golden and Wasil (1987) used the following criteria:Golden and Wasil (1987) used the following criteria:

1.1. Duration of record - years record has stood, years Duration of record - years record has stood, years expected to standexpected to stand

2.2. Incremental improvement - % better than previous Incremental improvement - % better than previous recordrecord

3.3. Other record characteristics - glamour, purity Other record characteristics - glamour, purity (single person vs. team)(single person vs. team)

RANKING SPORTS RECORDSRANKING SPORTS RECORDSDid this article end all arguments about sports records?Did this article end all arguments about sports records?

Absolutely not! Absolutely not!

In bars and living rooms across the country, people still In bars and living rooms across the country, people still argue about sports. argue about sports.

AHP provides a methodology to structure the debate. AHP provides a methodology to structure the debate.

Different criteria and different judgments could Different criteria and different judgments could produce different results.produce different results.

A FINAL POINT ABOUT SPORTSA FINAL POINT ABOUT SPORTS

In reading the sports pages we often see discussion In reading the sports pages we often see discussion of how well teams match up across different of how well teams match up across different positions. positions.

These match-ups are often used to predict a winner. These match-ups are often used to predict a winner.

Match-ups is a pairwise comparison concept!Match-ups is a pairwise comparison concept!


Our culture is obsessed with quantitative rankings of Our culture is obsessed with quantitative rankings of all sorts of things.all sorts of things.

There are many measurement problems associated There are many measurement problems associated with rankings of products, sports teams, with rankings of products, sports teams, universities, and the like.universities, and the like.

Many of these issues are discussed on a web site at:Many of these issues are discussed on a web site at:

http://www.expertchoice.com/annie.person.

The discussion of how to compare records from The discussion of how to compare records from different sports recalls a saying from childhood:different sports recalls a saying from childhood:

APPLES AND ORANGESAPPLES AND ORANGES


You can’t compare apples and oranges. All you You can’t compare apples and oranges. All you get is mixed fruit!get is mixed fruit!




After the discussion about sports, do you still believe After the discussion about sports, do you still believe this statement?this statement?


APPLES AND ORANGESAPPLES AND ORANGESThe discussion of how to compare records from The discussion of how to compare records from

different sports recalls a saying from childhood:different sports recalls a saying from childhood:


After the discussion about sports, do you still believe After the discussion about sports, do you still believe this statement?this statement?

We hope not!!!We hope not!!!

What criteria might What criteria might youyou use when comparing apples use when comparing apples and oranges?and oranges?

There are a vast set of criteria that may change There are a vast set of criteria that may change depending upon time of day or season of year:depending upon time of day or season of year:

taste,taste, texture,texture, smell,smell,

ripeness,ripeness, juiciness,juiciness, nutrition,nutrition,

shape,shape, weight,weight, color, andcolor, and

cost.cost.

Can you think of others?Can you think of others?


The point is that people are often confronted with the The point is that people are often confronted with the choice between apples and oranges. choice between apples and oranges.

Their choice is based on some psychological Their choice is based on some psychological assessment of: assessment of:

relevant criteria, relevant criteria,

their importance, and their importance, and

how well the alternatives achieve the how well the alternatives achieve the criteria.criteria.


CAR PURCHASE EXAMPLECAR PURCHASE EXAMPLE

We now consider a motivating example. We now consider a motivating example.

After completing this example, you will have an After completing this example, you will have an understanding of the basics of AHP and its understanding of the basics of AHP and its application through Expert Choice application through Expert Choice (www.expertchoice.com).(www.expertchoice.com).

We want to apply the AHP to help a couple decide We want to apply the AHP to help a couple decide which car they should purchase. which car they should purchase.

CAR PURCHASE EXAMPLECAR PURCHASE EXAMPLE

The couple is considering three criteria: cost, safety, The couple is considering three criteria: cost, safety, and appearance.and appearance.

They have narrowed their alternatives to three They have narrowed their alternatives to three specific cars: Honda, Mazda, and Volvo.specific cars: Honda, Mazda, and Volvo.

We demonstrate how to build the AHP hierarchy in We demonstrate how to build the AHP hierarchy in Expert Choice.Expert Choice.

Select the Select the FFile, ile, NNew ew option and enter a file name option and enter a file name such as CARS.EC1. (You must use the EC1 file such as CARS.EC1. (You must use the EC1 file extension.)extension.)

Choose the Choose the DDirectirect option to create the model. Next, option to create the model. Next, specify the description of the goal, such as, “Select specify the description of the goal, such as, “Select the best car.”the best car.”

EXPERT CHOICE: FILE SETUPEXPERT CHOICE: FILE SETUP

To enter the criteria, use the To enter the criteria, use the EEdit, dit, IInsert nsert command. command. Use the Esc key when finished entering the Use the Esc key when finished entering the criteria.criteria.

To add the alternative cars under the cost node, To add the alternative cars under the cost node, simply highlight the cost node and again use the simply highlight the cost node and again use the EEdit, dit, IInsert nsert command. Use the Esc key when command. Use the Esc key when finished.finished.


To include the same alternatives under the other To include the same alternatives under the other criteria nodes, first highlight the cost node, then criteria nodes, first highlight the cost node, then select select EEdit, dit, RReplicate children of current node, To eplicate children of current node, To PPeers, eers, YYeses..

Double-click on the goal node to display the Double-click on the goal node to display the complete hierarchy.complete hierarchy.

Additional details can be found in the Expert Choice Additional details can be found in the Expert Choice tutorial provided with the software.tutorial provided with the software.


ANALYZING THE HIERARCHYANALYZING THE HIERARCHY

1.1. Determine the weights of the alternatives for each Determine the weights of the alternatives for each criterion.criterion.

2.2. Determine the priorities or weights of the criteria Determine the priorities or weights of the criteria in achieving the goal.in achieving the goal.

3.3. Determine the overall weight of each alternative in Determine the overall weight of each alternative in achieving the goal. This is accomplished by achieving the goal. This is accomplished by combining the results of the first two stages and is combining the results of the first two stages and is called synthesis.called synthesis.

HYPOTHETICAL DATA FOR CAR HYPOTHETICAL DATA FOR CAR PURCHASE EXAMPLEPURCHASE EXAMPLE

CarCar CostCost Safety*Safety* AppearanceAppearance HondaHonda $22,000$22,000 2828 SportySporty Mazda Mazda 28,500 28,500 3939 SlickSlick Volvo Volvo 33,000 33,000 5252 DullDull

* Safety Rating from a consumer testing service - the * Safety Rating from a consumer testing service - the higher the number, the safer the car.higher the number, the safer the car.

DETERMINING PRIORITIESDETERMINING PRIORITIES

The couple begins by making The couple begins by making pairwise comparison pairwise comparison judgmentsjudgments between each pair of cars for the cost between each pair of cars for the cost criterion.criterion.

In our example, three judgments are needed: Honda In our example, three judgments are needed: Honda to Mazda, Mazda to Volvo, and Honda to Volvo. to Mazda, Mazda to Volvo, and Honda to Volvo.

STANDARD 1 - 9 MEASUREMENT SCALESTANDARD 1 - 9 MEASUREMENT SCALEIntensity of ImportanceIntensity of Importance DefinitionDefinition ExplanationExplanation

11 Equal importanceEqual importance Two activities contribute equallyTwo activities contribute equally

33 Moderate importanceModerate importance Experience and judgment slightly favor oneExperience and judgment slightly favor one

activity over anotheractivity over another

55 Strong importanceStrong importance Experience and judgment strongly favor oneExperience and judgment strongly favor one

activity over anotheractivity over another

77 Very strongVery strong An activity is favored very strongly overAn activity is favored very strongly over

anotheranother

99 Extreme importanceExtreme importance The evidence favoring one activity overThe evidence favoring one activity over

another is of the highest possible orderanother is of the highest possible order

of affirmationof affirmation

2, 4, 6, 82, 4, 6, 8 For compromiseFor compromise Sometimes one needs to interpolate aSometimes one needs to interpolate a

valuesvalues compromise between the above judgmentcompromise between the above judgment

numerically because there is no goodnumerically because there is no good

word to describe itword to describe it

1.1 - 1.91.1 - 1.9 For tied activitiesFor tied activities When elements are close and nearlyWhen elements are close and nearly

indistinguishable; moderate is 1.3 andindistinguishable; moderate is 1.3 and

extreme is 1.9extreme is 1.9

Reciprocals of aboveReciprocals of above If activity A hasIf activity A has For example, if the pairwise comparison ofFor example, if the pairwise comparison of

one of the above one of the above A to B is 3.0, then the pairwise comparisonA to B is 3.0, then the pairwise comparison

numbers assignednumbers assigned of B to A is 1/3of B to A is 1/3

to it when compared to it when compared

with activity B, with activity B,

then B has the then B has the

reciprocal value reciprocal value

when compared to A.when compared to A.

COST PAIRWISE COMPARISONSCOST PAIRWISE COMPARISONS

The pairwise comparisons are represented in the The pairwise comparisons are represented in the form of pairwise comparison matrices. form of pairwise comparison matrices.

The computation of the weights are also shown.The computation of the weights are also shown.

Consider the pairwise comparison matrix to compare Consider the pairwise comparison matrix to compare the cars for the cost criterion. the cars for the cost criterion.

Remember that the costs of the three cars are: Remember that the costs of the three cars are: $22000, $28500, and $33000, respectively.$22000, $28500, and $33000, respectively.

If we compare the Honda to the Honda, obviously If we compare the Honda to the Honda, obviously they are equal. they are equal.

Therefore, a 1 (equal preferred) is placed in the first Therefore, a 1 (equal preferred) is placed in the first row, first column entry of the matrix.row, first column entry of the matrix.


A. ORIGINAL COST PAIRWISE COMPARISON MATRIX A. ORIGINAL COST PAIRWISE COMPARISON MATRIX

Honda Mazda Volvo Honda Mazda Volvo

22K22K Honda Honda 11

28.5K28.5K Mazda Mazda

33K33K VolvoVolvo


The other entries along the main diagonal of the The other entries along the main diagonal of the matrix are also 1. matrix are also 1.

This simply means that everything is equally This simply means that everything is equally preferred to itself.preferred to itself.




22K22K Honda 1 Honda 1

28.5K28.5K Mazda Mazda 11

33K33K VolvoVolvo 11


Suppose we believe the Honda ($22000) is equally Suppose we believe the Honda ($22000) is equally to moderately preferred to the Mazda ($28500). to moderately preferred to the Mazda ($28500). Place a 2 in the row 1, column 2 entry.Place a 2 in the row 1, column 2 entry.

Some might argue that the Honda should be 1.295 Some might argue that the Honda should be 1.295 times better than the Mazda (28,500/22,000). times better than the Mazda (28,500/22,000).


Do you agree?Do you agree?

It depends! It depends!

For some, $28,500 is significantly greater than For some, $28,500 is significantly greater than $22,000, implying a judgments greater than 1.295. $22,000, implying a judgments greater than 1.295.

Others with a lot of money may perceive virtually no Others with a lot of money may perceive virtually no difference between the two costs, implying a difference between the two costs, implying a judgment somewhere between 1 and 1.295. judgment somewhere between 1 and 1.295.




22K22K Honda 1 Honda 1 2 2

28.5K28.5K Mazda 1Mazda 1

33K33K VolvoVolvo 1 1


If the Honda is 2 times better than the Mazda, this If the Honda is 2 times better than the Mazda, this implies that the Mazda ($28500) is one half as implies that the Mazda ($28500) is one half as good as the Honda ($22000). good as the Honda ($22000).

The reciprocal judgment, (1/2), should be placed in The reciprocal judgment, (1/2), should be placed in the row 2, column 1 entry of the matrix.the row 2, column 1 entry of the matrix.




22K22K Honda 1 2Honda 1 2

28.5K28.5K Mazda Mazda 1/21/2 1 1

33K33K VolvoVolvo 1 1


Suppose that we judge the Mazda ($28500) to be Suppose that we judge the Mazda ($28500) to be equally to moderately preferred to the Volvo equally to moderately preferred to the Volvo ($33000). ($33000).

The following judgments would be entered in the The following judgments would be entered in the matrix.matrix.




22K22K Honda 1 2Honda 1 2

28.5K28.5K Mazda 1/2 1Mazda 1/2 1 22

33K33K VolvoVolvo 1/2 1/2 1 1


Assuming perfect consistency of judgments, we Assuming perfect consistency of judgments, we would expect that the Honda ($22000) is 4 times would expect that the Honda ($22000) is 4 times (that is, moderately to strongly) preferred to the (that is, moderately to strongly) preferred to the Volvo ($33000). Volvo ($33000).

We will relax this assumption later.We will relax this assumption later.




22K22K Honda 1 2Honda 1 2 4 4

28.5K28.5K Mazda 1/2 1Mazda 1/2 1 2 2

33K33K VolvoVolvo 1/4 1/4 1/2 11/2 1


The matrix is now complete and the weights for each The matrix is now complete and the weights for each car (for the cost criterion) can be computed.car (for the cost criterion) can be computed.

The exact computational procedure is implemented The exact computational procedure is implemented in Expert Choice. For details see Expert Choice in Expert Choice. For details see Expert Choice homepage and download AHPDEMO.EXE.homepage and download AHPDEMO.EXE.


A simple three step procedure can be used to A simple three step procedure can be used to approximate the weights for each alternative.approximate the weights for each alternative.

Essentially, this procedure normalizes the ratios of Essentially, this procedure normalizes the ratios of the judgments between any pair of alternatives.the judgments between any pair of alternatives.


1.1. SUM THE ELEMENTS IN EACH COLUMN OF THE ORIGINAL MATRIX. SUM THE ELEMENTS IN EACH COLUMN OF THE ORIGINAL MATRIX.

2.2. DIVIDE EACH ELEMENT IN THE ORIGINAL MATRIX BY ITS COLUMN SUM.DIVIDE EACH ELEMENT IN THE ORIGINAL MATRIX BY ITS COLUMN SUM.

THIS RESULTS IN THE ADJUSTED MATRIX.THIS RESULTS IN THE ADJUSTED MATRIX.

3.3. COMPUTE THE ROW AVERAGES - THESE ARE THE WEIGHTS. COMPUTE THE ROW AVERAGES - THESE ARE THE WEIGHTS.



22K22K Honda 1 2 4 Honda 1 2 4

28.5K28.5K Mazda 1/2 1Mazda 1/2 1 2 2

33K33K Volvo 1/4 1/2 1Volvo 1/4 1/2 1

------- ------- -------------- ------- -------

COLUMN TOTALSCOLUMN TOTALS









28.5K28.5K Mazda 1/2 1Mazda 1/2 1 2 2

33K33K Volvo 1/4 1/2 1Volvo 1/4 1/2 1

------- ------- -------------- ------- -------

COLUMN TOTALSCOLUMN TOTALS 7/4 7/2 7 7/4 7/2 7









28.5K28.5K Mazda 1/2 1Mazda 1/2 1 2 2

33K33K Volvo 1/4 1/2 1Volvo 1/4 1/2 1

------- ------- -------------- ------- -------

COLUMN TOTALS 7/4 7/2 7 COLUMN TOTALS 7/4 7/2 7



22.. DIVIDE EACH ELEMENT IN THE ORIGINAL MATRIX BY ITS COLUMN SUM.DIVIDE EACH ELEMENT IN THE ORIGINAL MATRIX BY ITS COLUMN SUM.






28.5K28.5K Mazda 1/2 1Mazda 1/2 1 2 2

33K33K Volvo 1/4 1/2 1Volvo 1/4 1/2 1

------- ------- -------------- ------- -------

COLUMN TOTALS 7/4 7/2 7COLUMN TOTALS 7/4 7/2 7

B. ADJUSTED COST PAIRWISE COMPARISON MATRIX B. ADJUSTED COST PAIRWISE COMPARISON MATRIX

Honda Mazda VolvoHonda Mazda Volvo

HondaHonda 4/7* 4/7 4/7 4/7* 4/7 4/7

MazdaMazda 2/7 2/7 2/7 2/7 2/7 2/7

VolvoVolvo 1/7 1/7 1/7 1/7 1/7 1/7

* This entry is obtained by dividing the Honda entry in the original matrix (1) by * This entry is obtained by dividing the Honda entry in the original matrix (1) by the Honda column total (7/4).the Honda column total (7/4).


Notice that no variation is seen across the rows because Notice that no variation is seen across the rows because the judgments are perfectly consistent.the judgments are perfectly consistent.

For the third column, judgments totaling 7 were For the third column, judgments totaling 7 were awarded. The Honda received 4 of 7 (57.1%), the awarded. The Honda received 4 of 7 (57.1%), the Mazda 2 of 7 (28.6%), and the Volvo 1 of 7 (14.3%) Mazda 2 of 7 (28.6%), and the Volvo 1 of 7 (14.3%) of the weight. of the weight.

Similar comparisons can be made for the other two Similar comparisons can be made for the other two columns.columns.









28.5K28.5K Mazda 1/2 1Mazda 1/2 1 2 2

33K33K Volvo 1/4 1/2 1Volvo 1/4 1/2 1

------- ------- -------------- ------- -------




HondaHonda 4/7* 4/7 4/7 4/7* 4/7 4/7

MazdaMazda 2/7 2/7 2/7 2/7 2/7 2/7

VolvoVolvo 1/7 1/7 1/7 1/7 1/7 1/7

* This entry is obtained by dividing the Honda entry in the original matrix (1) by * This entry is obtained by dividing the Honda entry in the original matrix (1) by

the Honda column total (7/4).the Honda column total (7/4).









28.5K28.5K Mazda 1/2 1Mazda 1/2 1 2 2

33K33K Volvo 1/4 1/2 1Volvo 1/4 1/2 1

------- ------- -------------- ------- -------


B. ADJUSTED COST PAIRWISE COMPARISON MATRIX WEIGHTS B. ADJUSTED COST PAIRWISE COMPARISON MATRIX WEIGHTS

Honda Mazda Volvo (ROW AVG.)Honda Mazda Volvo (ROW AVG.)

Honda Honda 4/7* 4/7 4/7 0.571 4/7* 4/7 4/7 0.571

MazdaMazda 2/7 2/7 2/7 0.286 2/7 2/7 2/7 0.286

VolvoVolvo 1/7 1/7 1/7 0.143 1/7 1/7 1/7 0.143

--------- ---------

TOTALTOTAL 1.000 1.000

* This entry is obtained by dividing the Honda entry in the original matrix (1) by * This entry is obtained by dividing the Honda entry in the original matrix (1) by

the Honda column total (7/4).the Honda column total (7/4).


Expert Choice offers a variety of modes for entering Expert Choice offers a variety of modes for entering the judgments. the judgments.

Highlight the cost node, select Highlight the cost node, select AAssessment. ssessment.

There are three options: There are three options: PPairwise, airwise, DDataata, and , and RRatingsatings. .

Ratings will be discussed later.Ratings will be discussed later.

EXPERT CHOICE: Entering JudgmentsEXPERT CHOICE: Entering Judgments

The The DDataata option allows the user to enter data items option allows the user to enter data items for each alternative, for example, costs, miles per for each alternative, for example, costs, miles per gallon, and number of defects. gallon, and number of defects.

Expert Choice takes the ratio of these data items and Expert Choice takes the ratio of these data items and converts them into pairwise comparisons.converts them into pairwise comparisons.

What assumption are you making if you use the Data What assumption are you making if you use the Data option?option?

The data items have a linear preference scale, that The data items have a linear preference scale, that is, a $20,000 car is twice as good as a $40,000 car. is, a $20,000 car is twice as good as a $40,000 car.


To enter our cost judgments choose To enter our cost judgments choose PPairwise.airwise.

When comparing alternatives select When comparing alternatives select PPreferencereference for for TTypeype; for criteria select ; for criteria select IImportancemportance..

ModesModes options are: options are: VVerbal, erbal, MMatrix atrix (numerical), (numerical), QQuestionnaire, uestionnaire, and and GGraphicraphic. .

AAssessment, ssessment, PPairwise, airwise, MMatrix atrix is demonstrated. is demonstrated.

Enter judgments, Enter judgments, CCalculatealculate and and RRecordecord. .


INCONSISTENCY OF JUDGMENTSINCONSISTENCY OF JUDGMENTSSince our pairwise comparisons were perfectly Since our pairwise comparisons were perfectly

consistent, Expert Choice reports consistent, Expert Choice reports INCONSISTENCY RATIO = 0.0.INCONSISTENCY RATIO = 0.0.

If this ratio is greater than 0.1 some revision of If this ratio is greater than 0.1 some revision of judgments is required.judgments is required.

Select Select InconsisInconsisttencyency (within (within AAssessmentssessment, , PPairwiseairwise) ) to identify the most inconsistent judgments.to identify the most inconsistent judgments.

INCONSISTENCY OF JUDGMENTSINCONSISTENCY OF JUDGMENTSInconsistency of judgments may result from:Inconsistency of judgments may result from:

problems of estimation;problems of estimation;

errors between the comparisons;errors between the comparisons;

or, the comparisons may be naturally inconsistent. or, the comparisons may be naturally inconsistent.

INCONSISTENCY OF JUDGMENTSINCONSISTENCY OF JUDGMENTSOne example of natural inconsistency is in a sporting One example of natural inconsistency is in a sporting

contest. contest.

If team A is twice as likely to beat team B, and if If team A is twice as likely to beat team B, and if team B is three times as likely to beat team C, this team B is three times as likely to beat team C, this does not necessarily imply that team A is six times does not necessarily imply that team A is six times as likely to beat team C. as likely to beat team C.

This inconsistency may result because of the way This inconsistency may result because of the way that the teams “match-up” overall.that the teams “match-up” overall.

INCONSISTENCY OF JUDGMENTSINCONSISTENCY OF JUDGMENTS

The point is not to stop inconsistency from The point is not to stop inconsistency from occurring. occurring.

Make sure that the level of inconsistency remains Make sure that the level of inconsistency remains within some reasonable limit. within some reasonable limit.


How does a judgment change affect the car weights?How does a judgment change affect the car weights?

Suppose the Mazda to Volvo changes from 2 to 3. Suppose the Mazda to Volvo changes from 2 to 3.

This obviously changes the comparison for Volvo to This obviously changes the comparison for Volvo to Mazda from (1/2) to (1/3). Mazda from (1/2) to (1/3).

The judgments are now somewhat inconsistent. The judgments are now somewhat inconsistent.




28.5K28.5K Mazda 1/2 1Mazda 1/2 1 3 3

33K33K Volvo 1/4Volvo 1/4 1/3 1/3 11









28.5K28.5K Mazda 1/2 1Mazda 1/2 1 3 3

33K33K Volvo 1/4 1/3 1Volvo 1/4 1/3 1

------- ------- -------------- ------- -------

COLUMN TOTALSCOLUMN TOTALS 7/4 10/3 8 7/4 10/3 8



22.. DIVIDE EACH ELEMENT IN THE ORIGINAL MATRIX BY ITS COLUMN SUM.DIVIDE EACH ELEMENT IN THE ORIGINAL MATRIX BY ITS COLUMN SUM.






28.5K28.5K Mazda 1/2 1Mazda 1/2 1 3 3

33K33K Volvo 1/4 1/3 1Volvo 1/4 1/3 1

------- ------- -------------- ------- -------

COLUMN TOTALS COLUMN TOTALS 7/4 10/3 87/4 10/3 8



HondaHonda 4/7* 6/10 4/8 4/7* 6/10 4/8

MazdaMazda 2/7 3/10 3/8 2/7 3/10 3/8

VolvoVolvo 1/7 1/10 1/8 1/7 1/10 1/8










28.5K28.5K Mazda 1/2 1Mazda 1/2 1 3 3

33K33K Volvo 1/4 1/3 1Volvo 1/4 1/3 1

------- ------- -------------- ------- -------


B. ADJUSTED COST PAIRWISE COMPARISON MATRIX WEIGHTSB. ADJUSTED COST PAIRWISE COMPARISON MATRIX WEIGHTS

Honda Mazda Volvo (ROW AVG.)Honda Mazda Volvo (ROW AVG.)

Honda 4/7* 6/10 4/8Honda 4/7* 6/10 4/8 0.557 0.557

Mazda 2/7 3/10 3/8Mazda 2/7 3/10 3/8 0.320 0.320

Volvo 1/7 1/10 1/8Volvo 1/7 1/10 1/8 0.123 0.123

----------------

TOTAL TOTAL 1.0001.000




The new weights are: 0.557, 0.320, and 0.123. The The new weights are: 0.557, 0.320, and 0.123. The inconsistency resulted in some change in the inconsistency resulted in some change in the original weights of 0.571, 0.286, and 0.143. original weights of 0.571, 0.286, and 0.143.

As expected, the weight for the Mazda increased As expected, the weight for the Mazda increased while the weight for the Volvo decreased.while the weight for the Volvo decreased.

The weights now vary across each row. Essentially, The weights now vary across each row. Essentially, inconsistency measures the degree of variation inconsistency measures the degree of variation across the rows.across the rows.

Highlight cost node, select Highlight cost node, select AAssessment, ssessment, PPairwise.airwise.

Enter a 3 in the Mazda to Volvo cell then Enter a 3 in the Mazda to Volvo cell then CCalculatealculate..

The weights of 0.558, 0.320, and 0.122 are slightly The weights of 0.558, 0.320, and 0.122 are slightly different from the three-step procedure weights.different from the three-step procedure weights.

This is not due to rounding -- Expert Choice gives This is not due to rounding -- Expert Choice gives the exact results.the exact results.

The INCONSISTENCY RATIO is now 0.02.The INCONSISTENCY RATIO is now 0.02.

EXPERT CHOICE: Revising JudgmentsEXPERT CHOICE: Revising Judgments


The weights can also be used to measure the The weights can also be used to measure the effectiveness of the alternatives. effectiveness of the alternatives.

For example, based on all pairwise comparisons, we For example, based on all pairwise comparisons, we determined that the Honda is 1.74 (0.558/0.320) determined that the Honda is 1.74 (0.558/0.320) times better than the Mazda.times better than the Mazda.

Why is this ratio 1.74 and not the pairwise Why is this ratio 1.74 and not the pairwise comparison of 2?comparison of 2?

Inconsistency in the judgments!Inconsistency in the judgments!

REMAINING COMPUTATIONSREMAINING COMPUTATIONSNext, the cars must be pairwise compared for the Next, the cars must be pairwise compared for the

safety criterion and then for the appearance safety criterion and then for the appearance criterion. criterion.

These judgments are shown on the next page.These judgments are shown on the next page.

Since the Mazda to Honda safety comparison is 2, Since the Mazda to Honda safety comparison is 2, highlight the Honda to Mazda cell, click highlight the Honda to Mazda cell, click IInvertnvert, , and enter 2.and enter 2.

This judgment now appears in red.This judgment now appears in red.

SAFETY & APPEARANCE JUDGMENTSSAFETY & APPEARANCE JUDGMENTS

Safety Pairwise Comparison Matrix Safety Pairwise Comparison Matrix

HondaHonda MazdaMazda Volvo Volvo

2828 Honda Honda 11 1/21/2 1/51/5

3939 Mazda Mazda 22 11 1/41/4

5252 Volvo Volvo 55 44 11

Appearance Pairwise Comparison Matrix Appearance Pairwise Comparison Matrix

HondaHonda MazdaMazda Volvo Volvo

SportySportyHondaHonda 11 55 99

SlickSlick MazdaMazda 1/51/5 11 22

DullDull VolvoVolvo 1/91/9 1/21/2 1 1

REMAINING COMPUTATIONSREMAINING COMPUTATIONS

Next, the criteria must be pairwise compared. Next, the criteria must be pairwise compared.

These judgments are shown on the next page. These judgments are shown on the next page.

There are no data to support these judgments since There are no data to support these judgments since they are purely a reflection of your preferences.they are purely a reflection of your preferences.

CRITERIA JUDGMENTSCRITERIA JUDGMENTS

Original Criteria Pairwise Comparison MatrixOriginal Criteria Pairwise Comparison Matrix

CostCost SafetySafety AppearanceAppearance

CostCost 11 1/21/2 33

SafetySafety 22 11 55

AppearanceAppearance 1/31/3 1/51/5 11

REMAINING COMPUTATIONSREMAINING COMPUTATIONS

The last stage computes the final weights for each car. The last stage computes the final weights for each car.

Multiply the criteria weight by the car weight for each Multiply the criteria weight by the car weight for each criterion and then sum over all criteria. criterion and then sum over all criteria.

This is nothing more than a weighted average.This is nothing more than a weighted average.

The computational results are shown next.The computational results are shown next.

FINAL CAR WEIGHTSFINAL CAR WEIGHTS CRITERIA WEIGHTSCRITERIA WEIGHTS

COST SAFETY APPEARANCECOST SAFETY APPEARANCE

0.309 0.582 0.1090.309 0.582 0.109

CARS CARS FINAL WEIGHTS FINAL WEIGHTS

Honda 0.558 0.117 0.761Honda 0.558 0.117 0.761

Mazda 0.320 0.200 0.158Mazda 0.320 0.200 0.158

Volvo 0.122 0.683 0.082Volvo 0.122 0.683 0.082



0.309 0.582 0.1090.309 0.582 0.109


Honda 0.558 0.117 0.761 Honda 0.558 0.117 0.761 0.3240.324

Mazda 0.320 0.200 0.158Mazda 0.320 0.200 0.158

Volvo 0.122 0.683 0.082Volvo 0.122 0.683 0.082

Honda: (0.558)(0.309) + (0.117)(0.582) + (0.761)(0.109) = 0.324Honda: (0.558)(0.309) + (0.117)(0.582) + (0.761)(0.109) = 0.324

0.1730.173 0.068 0.068 0.083 0.083



0.309 0.582 0.1090.309 0.582 0.109


Honda 0.558 0.117 0.761 0.324Honda 0.558 0.117 0.761 0.324

Mazda 0.320 0.200 0.158 Mazda 0.320 0.200 0.158 0.2320.232

Volvo 0.122 0.683 0.082Volvo 0.122 0.683 0.082

Honda: (0.558)(0.309) + (0.117)(0.582) + (0.761)(0.109) = 0.324Honda: (0.558)(0.309) + (0.117)(0.582) + (0.761)(0.109) = 0.324

0.1730.173 0.068 0.068 0.083 0.083

Mazda: (0.320)(0.309) + (0.200)(0.582) + (0.158)(0.109) = 0.232Mazda: (0.320)(0.309) + (0.200)(0.582) + (0.158)(0.109) = 0.232

0.0990.099 0.116 0.116 0.017 0.017



0.309 0.582 0.1090.309 0.582 0.109


Honda 0.558 0.117 0.761 0.324Honda 0.558 0.117 0.761 0.324

Mazda 0.320 0.200 0.158 0.232Mazda 0.320 0.200 0.158 0.232

Volvo 0.122 0.683 0.082Volvo 0.122 0.683 0.082 0.444 0.444

Honda: (0.558)(0.309) + (0.117)(0.582) + (0.761)(0.109) = 0.324Honda: (0.558)(0.309) + (0.117)(0.582) + (0.761)(0.109) = 0.324

0.1730.173 0.068 0.068 0.083 0.083

Mazda: (0.320)(0.309) + (0.200)(0.582) + (0.158)(0.109) = 0.232Mazda: (0.320)(0.309) + (0.200)(0.582) + (0.158)(0.109) = 0.232

0.0990.099 0.116 0.116 0.017 0.017

Volvo: (0.122)(0.309) + (0.683)(0.582) + (0.082)(0.109) = 0.444Volvo: (0.122)(0.309) + (0.683)(0.582) + (0.082)(0.109) = 0.444

0.0380.038 0.397 0.397 0.009 0.009

LOCAL VS GLOBAL WEIGHTSLOCAL VS GLOBAL WEIGHTS

For cost, the local weights for the cars are 0.558, 0.320, For cost, the local weights for the cars are 0.558, 0.320, and 0.122 and sum to 1.000.and 0.122 and sum to 1.000.

The global weights are computed by multiplying the cost The global weights are computed by multiplying the cost criterion weight by the local car weights.criterion weight by the local car weights.

The global weights are 0.173, 0.099, and 0.038 and sum to The global weights are 0.173, 0.099, and 0.038 and sum to the cost criterion weight of 0.309.the cost criterion weight of 0.309.

To compute the final weights select To compute the final weights select SSynthesisynthesis ( (from from GGOALOAL).).

Choose Choose DisDisttributiveributive Mode and Display Mode and Display SSummaryummary..

DDetailsetails provides the global weights. provides the global weights.

The output can also be exported to a spreadsheet The output can also be exported to a spreadsheet using the using the UUtilitiestilities, , Export Model(s) to SpreadsheetExport Model(s) to Spreadsheet commands.commands.

EXPERT CHOICE: SynthesisEXPERT CHOICE: Synthesis

The Print icon can be used to select certain options. The Print icon can be used to select certain options.

The recommended print options are: The recommended print options are: EEntire Tree, ntire Tree, TTree Views, ree Views, JJudgments/Data, udgments/Data, andand S Syynthesisnthesis..

EXPERT CHOICE: PrintingEXPERT CHOICE: Printing

INTERPRETING THE RESULTSINTERPRETING THE RESULTS

The final weights provide a measure of the relative The final weights provide a measure of the relative performance of each alternative. performance of each alternative.

It is important to properly interpret the meaning of It is important to properly interpret the meaning of these numbers.these numbers.

The Volvo is ranked first, the Honda second, and The Volvo is ranked first, the Honda second, and Mazda third.Mazda third.

The Volvo is preferred 1.37 (0.444/0.324) times The Volvo is preferred 1.37 (0.444/0.324) times more than the Honda.more than the Honda.

INTERPRETING THE RESULTSINTERPRETING THE RESULTSShould we buy the Volvo?Should we buy the Volvo?

The output is a decision-making aid and cannot The output is a decision-making aid and cannot replace the decision-maker.replace the decision-maker.

The results can be used to support discussion and The results can be used to support discussion and possibly the judgments will be revised. possibly the judgments will be revised.

This iterative process is quite normal. This iterative process is quite normal.

AHP can help to facilitate communication and AHP can help to facilitate communication and generate consensus between different groups. generate consensus between different groups.

SENSITIVITY ANALYSISSENSITIVITY ANALYSIS

Sensitivity analysis is an important aspect of any Sensitivity analysis is an important aspect of any decision-making process.decision-making process.

Sensitivity analysis determines whether small changes Sensitivity analysis determines whether small changes in judgments affects the final weights and rankings in judgments affects the final weights and rankings of the alternatives. of the alternatives.

If so, the decision-maker may want to review the If so, the decision-maker may want to review the sensitive judgments.sensitive judgments.

EXPERT CHOICE: Sensitivity AnalysisEXPERT CHOICE: Sensitivity Analysis

In Expert Choice sensitivity analysis from the GOAL In Expert Choice sensitivity analysis from the GOAL shows how the weights and the rankings of the shows how the weights and the rankings of the alternatives change if some or all of the criteria alternatives change if some or all of the criteria weights change.weights change.

There are five graphical sensitivity analysis modes There are five graphical sensitivity analysis modes available: Performance, Dynamic, Gradient, Two-available: Performance, Dynamic, Gradient, Two-Dimensional, and Difference. Dimensional, and Difference.

The first three show how a change in a criterion The first three show how a change in a criterion weight affects the final weights of the alternatives.weight affects the final weights of the alternatives.

The last two show how the alternatives perform with The last two show how the alternatives perform with respect to any two criteria.respect to any two criteria.

PerformancePerformance: places all sensitivity information on a : places all sensitivity information on a single chart with horizontal line graphs for the single chart with horizontal line graphs for the alternatives linked to vertical bars for the criteria.alternatives linked to vertical bars for the criteria.

DynamicDynamic: two sets of dynamically linked horizontal : two sets of dynamically linked horizontal bar graphs: one for criteria and one for bar graphs: one for criteria and one for alternatives.alternatives.


GradientGradient: a line graph that shows how the weights of : a line graph that shows how the weights of the alternatives vary according to the weight the alternatives vary according to the weight assigned to a specific criterion. (Use the assigned to a specific criterion. (Use the XX-Axis-Axis to to change the selected criterion.)change the selected criterion.)

Two-DimensionalTwo-Dimensional: shows how well the alternatives : shows how well the alternatives perform with respect to any two criteria.perform with respect to any two criteria.

DifferenceDifference: a graph that shows the differences : a graph that shows the differences between any two alternatives for any criterion.between any two alternatives for any criterion.


An important use of sensitivity analysis is to An important use of sensitivity analysis is to determine how much a given criterion weight determine how much a given criterion weight must change before there is a change in the must change before there is a change in the rankings of the two highest alternatives. rankings of the two highest alternatives.

This type of breakeven analysis can be easily done in This type of breakeven analysis can be easily done in Expert Choice.Expert Choice.


Choose Choose DDynamicynamic from the from the Sensitivity-Sensitivity-GGraphsraphs option. option.

Drag the cost criterion bar 30.9% to approximately Drag the cost criterion bar 30.9% to approximately 45.9%, and see that the Volvo and Honda have the 45.9%, and see that the Volvo and Honda have the same highest final weight. same highest final weight.

The final rankings are relatively insensitive to a The final rankings are relatively insensitive to a change in the cost criterion weight because the change in the cost criterion weight because the cost weight had to be increased by almost 50% to cost weight had to be increased by almost 50% to get a change in the rankings.get a change in the rankings.


NEW PRODUCT INTRODUCTIONNEW PRODUCT INTRODUCTION

CHOCK-FUL-O-CHIPS developed the following CHOCK-FUL-O-CHIPS developed the following hierarchy and data that can be used to help decide hierarchy and data that can be used to help decide which chocolate chip recipe they should use.which chocolate chip recipe they should use.

Select the best recipeSelect the best recipe

Taste Cost Fat ContentTaste Cost Fat Content

Recipe 1Recipe 1

Recipe 2Recipe 2

Recipe 3Recipe 3

Recipe 4Recipe 4

Recipe 1Recipe 1

Recipe 2Recipe 2

Recipe 3Recipe 3

Recipe 4Recipe 4

Recipe 1Recipe 1

Recipe 2Recipe 2

Recipe 3Recipe 3

Recipe 4Recipe 4

RECIPE DATARECIPE DATA

Taste Fat ContentTaste Fat Content

Recipe Cost* Rating** (Grams)*Recipe Cost* Rating** (Grams)*

11 $0.166 $0.166 54%54% 8.08.0

22 0.099 0.099 24%24% 7.07.0

33 0.265 0.265 20%20% 3.53.5

44 0.224 0.224 43%43% 6.06.0* Per one ounce cookie* Per one ounce cookie

** Percentage of people who rated a cookie either an 8 or ** Percentage of people who rated a cookie either an 8 or 9 on a 9-point scale, where 9 means extremely liked, 8 9 on a 9-point scale, where 9 means extremely liked, 8 means liked very much, and down to one which means means liked very much, and down to one which means extremely disliked. extremely disliked.

TASTE PAIRWISE COMPARISON TASTE PAIRWISE COMPARISON MATRIXMATRIX

54% 24% 20% 43%54% 24% 20% 43%

Recipe 1 Recipe 2 Recipe 3 Recipe 4Recipe 1 Recipe 2 Recipe 3 Recipe 4

Recipe 1Recipe 1 1 1

Recipe 2Recipe 2 11


Recipe 4Recipe 4 11

COST PAIRWISE COMPARISON COST PAIRWISE COMPARISON MATRIXMATRIX

0.166 0.099 0.265 0.2240.166 0.099 0.265 0.224



Recipe 2Recipe 2 11


Recipe 4Recipe 4 11

FAT CONTENT PAIRWISE FAT CONTENT PAIRWISE COMPARISON MATRIXCOMPARISON MATRIX

8.0 7.0 3.5 6.08.0 7.0 3.5 6.0



Recipe 2Recipe 2 11


Recipe 4Recipe 4 11

CRITERIA PAIRWISE CRITERIA PAIRWISE COMPARISON MATRIXCOMPARISON MATRIX

TasteTaste CostCost Fat ContentFat Content

TasteTaste 1 1

CostCost 1 1

Fat ContentFat Content 11

FINAL WEIGHTS FROM EXPERT FINAL WEIGHTS FROM EXPERT CHOICECHOICE

Criteria WeightsCriteria Weights

Taste Cost Fat ContentTaste Cost Fat Content

FinalFinal

Weights Weights

Recipe 1Recipe 1

Recipe 2Recipe 2

Recipe 3 Recipe 3

Recipe 4Recipe 4

SUMMARYSUMMARY

In this chapter:In this chapter:

we provided an overview of operations management; we provided an overview of operations management; andand

offered the AHP as a decision-making process with offered the AHP as a decision-making process with application in operations management.application in operations management.

SUMMARYSUMMARY

AHP benefits include:AHP benefits include:

natural way to elicit judgments;natural way to elicit judgments;

measure degree of inconsistency;measure degree of inconsistency;

easy to use;easy to use;

allows broad participation; andallows broad participation; and

fully supported by Expert Choice.fully supported by Expert Choice.

Mazda Omintro

Automotive

Transcript of Mazda Omintro