Using this method, they can determine the statistically most justifiable choice. However, it is important that the company knows which choice will be the best in the end and what advantages and disadvantages it has. The criteria are present to a greater or a lesser degree for each of the alternatives. The manufacturer has three alternatives: Manufacture the toys themselves, partner up with a wooden toy manufacturing company, or outsource the production process to another company. (1) is very important to the manufacturer, (5) is less important. The numbers following each of the criteria indicate their importance. Criteriaįirst of all, the toys should be safe (1), contain no toxic processing agents (2), be educational for children aged 1 – 5 (3), fit in cardboard packaging (4), and be able to be manufactured sustainably (5).
This leads to the following basic structure: ObjectiveĪdd a new product group Wooden Toys to the portfolio within two years. Consider a toy manufacturer who, out of corporate social responsibility, sets the objective to produce more unpainted, wooden toys. The following example will illustrate the basic structure of Analytic Hierarchy Process. Alternativesīy thinking of alternative solutions and their advantages and disadvantages, the organisation is guided to the best final decision. By setting criteria, everyone is aware of the requirements when making a decision. Each objective has criteria which are important to a greater or a lesser degree to achieve it. Criteriaīy determining the criteria important to achieving the goal, a framework is established. That is why it starts with a simple decision-making structure: Objectiveīy creating SMART Goals (specific – measurable – achievable – relevant – time-bound) in advance, everyone in the organisation knows what they want to achieve. Analytic Hierarchy Process can help provide concrete choices for abstract decisions. Subsequently, the potential solutions are determined and calculated. The Analytic Hierarchy Process method can then be used to assign certain values to the criteria that are important to make the right choice. This method is particularly useful in case of complex decisions involving abstract choices, but for which certain conditions can be set. Analytic Hierarchy Process : From abstract to concrete These values are then taken into account in the AHP process. The group decides the values of criteria that are important for making a decision. This helps to create as much support for the final decision as possible.Īnalytic Hierarchy Process is often focused on the group process. This method has therefore been developed to make the decision-making process transparent and accessible to as many of those involved as possible. The more people involved in a decision, the more difficult it is to make. SupportĪnalytic Hierarchy Process gives insight into why certain choices are made. This method is therefore both a psychological and mathematical method. Do you want unlimited and ad-free access? Find out moreĪ concrete choice can be made using a prescribed calculation and based on seemingly abstract decision-making criteria.Ī value is assigned to the criteria relevant to making the right choice, after which possible solutions are mathematically calculated and determined.
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