Analytic Hierarchy Process (AHP)

The Analytic Hierarchy Process (AHP) is a multi-criteria decision-making method developed by Thomas L. Saaty in 1980. A decision problem is modeled as a hierarchy: the goal at the top, main criteria below, sub-criteria deeper, and alternatives at the bottom. At each level the decision maker performs pairwise comparisons — 'how much more important is criterion A than criterion B' — on Saaty's 1-9 scale. The dominant eigenvector of the comparison matrix yields the criterion weights. The defining feature of the method is the Consistency Ratio (CR): it measures the internal consistency of the judgments; CR<0.1 is acceptable, anything higher means the judgments contradict one another and must be revised. AHP is applied in supplier selection (Weber et al. 1991; De Boer et al. 2001), facility location, project portfolio prioritization, personnel evaluation, and any other multi-criteria context. Extensions include Fuzzy AHP for uncertainty in judgments, the Analytic Network Process (ANP) for interdependence among criteria, and geometric-mean aggregation for group decisions.