A heuristics approach for computing the largest eigenvalue of a pairwise comparison matrix

Pairwise comparison matrices (PCMs) are widely used to capture subjective human judgements, especially in the context of the Analytic Hierarchy Process (AHP). Consistency of judgements is normally computed in AHP context in the form of consistency ratio (CR), which requires estimation of the largest eigenvalue (Lmax) of PCMs. Since many of these alternative methods do not require calculation of eigenvector, Lmax and hence the CR of a PCM cannot be easily estimated. We propose in this paper a simple heuristics for calculating Lmax without any need to use Eigenvector Method (EM). We illustrated the proposed procedure with larger size matrices. Simulation is used to compare the accuracy of the proposed heuristics procedure with actual Lmax for PCMs of various sizes. It has been found that the proposed heuristics is highly accurate, with errors less than 1%. The proposed procedure would avoid biases and help managers to make better decisions. The advantage of the proposed heuristics is that it can be easily calculated with simple calculations without any need for specialised mathematical procedures or software and is independent of the method used to derive priorities from PCMs

DECISION SUPPORT AT THE LOGISTIC MANAGEMENT STRATEGY

Nowadays logistics more and more often becomes the strategic issue from thepoint of view the organization aiming at reaching success in lead of its activity. The standardprocess of strategic logistics planning and management is usually periodical and the chanceof cooperation with changes in the environment of the company is missing. The paperpresents the process of logistics planning and its integration with the decision support systembased on the hierarchic analytic process - AHP (Analytic Hierarchy Process).logistics, logistic management, decision support system

A robust fuzzy possibilistic AHP approach for partner selection in international strategic alliance

The international strategic alliance is an inevitable solution for making competitive advantage and reducing the risk in today’s business environment. Partner selection is an important part in success of partnerships, and meanwhile it is a complicated decision because of various dimensions of the problem and inherent conflicts of stockholders. The purpose of this paper is to provide a practical approach to the problem of partner selection in international strategic alliances, which fulfills the gap between theories of inter-organizational relationships and quantitative models. Thus, a novel Robust Fuzzy Possibilistic AHP approach is proposed for combining the benefits of two complementary theories of inter-organizational relationships named, (1) Resource-based view, and (2) Transaction-cost theory and considering Fit theory as the perquisite of alliance success. The Robust Fuzzy Possibilistic AHP approach is a noveldevelopment of Interval-AHP technique employing robust formulation; aimed at handling the ambiguity of the problem and let the use of intervals as pairwise judgments. The proposed approach was compared with existing approaches, and the results show that it provides the best quality solutions in terms of minimum error degree. Moreover, the framework implemented in a case study and its applicability were discussed

WHY FUZZY ANALYTIC HIERARCHY PROCESS APPROACH FOR TRANSPORT PROBLEMS?

The evaluation of transport projects has become increasingly complex. Different aspects have to be taken into account and the consequences of the problems are usually far reaching and the different policy alternatives are numerous and difficult to predict. Several pressure or action groups have also emerged causing an even more complex decision making process. The use of multi criteria analysis for the evaluation of transport projects has increased due to this increasing complexity of the problem situation. At the same time, the importance of stakeholders within this evaluation process should have been recognized. Researches on transport projects are generally carried out to provide information to policymakers that have to operate within restrictive parameters (political, economical, social, etc…). Researchers should therefore take greater account of the different priorities of stakeholders such as policymakers, private enterprises and households. These stakeholders should be incorporated explicitly in the evaluation process. The Analytic Hierarchy Process is one of the Fuzzy Multiple Criteria Decision Making methods. It can be applied in a very broad range of applications of decision problems. Logistics, urban planning, public politics, marketing, finance, education, economics are a part of this wide application area. In transport subjects it can be used for the evaluation of transport policy measures or decision making problems. Due to its wide range application area, it has been an exciting research subject for many different field researchers. The aim of this paper is to introduce AHP method and to offer how to benefit it for the preference of urban planners in transport problems. This paper is composed of two main parts. First part consists of the literature survey regarding with the AHP and its application areas. The advantage of methods had been mentioned. Second part focuses on a sample application of AHP technique. The study uses AHP technique to determine the selection criteria in the transhipment port selection decision-making process. Keywords: Analytic Hierarchy Process, Multi criteria analysis, Transshipment port selection.

Risks of investment in personnel development: evidence from Ukrainian IT companies

In this paper, we examine key factors that influence the risks of investment in the development of human capital of a firm in the IT sector and estimate their weight in the overall risk. In particular, we single out the risk of premature voluntary termination of an employee, the risk of ineffective training, and the risk of a firm’s incorrect employee development strategy. Moreover, to support management of the mentioned kinds of risks, we enumerate the factors that influence them and classify those factors into three main groups: related to the employee, related to the firm, and related to the external environment. Based on this division, we build a model for estimating the risks of investing in the development of personnel using the Analytic Hierarchy Process (AHP)

A review of multi-criteria decision making methods for enhanced maintenance delivery

Conventionally there is a strong relation between manufacturing and services in complex engineering industries. For companies which aim to last in the competitive manufacturing market choosing appropriate decision making methods to improve their maintenance delivery has a vital role. The aim of this paper is to review Multi Criteria Decision Making (MCDM) models, evaluate each method and do a critical comparison to assess them from a maintenance management point of view. The first section of this paper reviews MCDM methods in different literature, and then the second part develops a set of criteria to classify different techniques. At the end methods are compared based on developed criteria. This paper assesses different MCDM models, and provides a framework to select approaches for maintenance management

Application of the analytic hierarchy process method in a comparison of financial leasing and loans

Decision making is an integral part of all business processes. Some decisions are spontaneous and others time consuming, requiring detailed information about their implications. Decision making can be performed according to perspectives that may also be conflicting in nature. Models that are helpful in dealing with such problems are multi-criteria decision-making methods. The most important method in this group is the analytic hierarchy process. The principle of the analytic hierarchy process is the distribution of the main parts into smaller and more detailed elements and thus the creation of a structured problem. The aim of this paper is to select the optimal form of asset acquisition (loan or leasing) according to clients’ selected criteria using the analytic hierarchy proces (AHP) and a sensitivity analysis to assess the resulting rank of alternatives. Based on the criteria, financial leasing with a high down payment was selected as the best alternative. By means of the sensitivity analysis, it was found that the best alternative is not sensitive to a change in the weights estimated by the AHP