DECISION MAKING. for LEADERS THE ANALYTIC HIERARCHY PROCESS FOR DECISIONS IN A COMPLEX WORLD THOMAS L. SAATY

Transcription

1 DECISION MAKING for LEADERS THE ANALYTIC HIERARCHY PROCESS FOR DECISIONS IN A COMPLEX WORLD THOMAS L. SAATY University of Pittsburgh 322 Mervis Hall Pittsburgh, PA 15260

2 Preface ix Introduction 1 Making Decisions in a Complex World Coping with Complexity 3 Rationale for a New Framework 4 Organizing Knowledge for Decisions 5 Ethical Considerations 10 Perspective 12 Key Concepts 13 The Analytic Hierarchy Process What it is and How it Works 15 Principles of Analytic Thinking 17 Measurement 18 AHP: A Flexible Model for Decision Making 23 Perspective 24 Key Concepts 28 Analyzing and Structuring Hierarchies Hierarchies: A Tool of the Mind 30 Classifying Hierarchies 30 Constructing Hierarchies 31

3 VI DECISION MAKING FOR LEADERS How to Structure a Hierarchy 34 Perspective 35 Key Concepts Practical Examples of Hierarchies An Approach to Hierarchies 38 Business Decisions 40 Personal and Domestic Decisions 48 Public Policy Decisions 53 Planning Economic Policies 59 Estimating and Predicting 61 Measuring Influences 64 Representing Systems Networks 65 Perspective Establishing Priorities The Need for Priorities 71 Making Judgments 71 Deriving Priorities 74 Consistency 80 Two Concrete Examples 84 Extending the Process 86 Perspective 91 Key Concepts Step-by-Step Examples of the Process An Outline of the Steps 94 Analyzing the Hostage Rescue Operation 95 Determining Consumer Preference 102 Estimating the Economy's Impact on Sales 106 Selecting a Portfolio 108 How Valid is the Process? 117 Perspective Details of the AHP in a Nutshell How to Structure a Hierarchy 120 The Hospice Problem 120 Approaching the Problem 121 Judgements and Comparisons 125 The Distributive and Ideal Modes 130 A Sustainable Metropolitan Growth Problem 133

4 CONTENTS Criteria and Subcriteria Matrices 133 Absolute Measurement 136 Combining Absolute and Relative Measurement 140 Observation on Subsequent Examples 140 Sensitivity Analysis 140 Homogeneity and Clustering 142 What to do When Known Scales are Involved 143 Transforming Scale Readings to Priorities 145 Problems with Analytic Decision Making 145 An Example of Rank Reversal 146 How Close are Two Ratio Scales 147 Perspective 149 Key Concepts Planning Charting the Future 153 Approaches to Planning 153 Scenarios 155 Perspective 156 Key Concepts Practical Examples of Planning Five Glimpses into the Future 159 Forward Planning: The Future of Higher Education 159 Forward Planning: Projecting Oil Prices 166 Backward Planning: The Sudan Transport Study 172 Forward-Backward Planning: The Future of the Steel Industry 177 Forward-Backward Planning: Dealing with Traffic Congestion 186 Perspective Resolving Conflict Working Forward and Backward 203 First Forward Process 203 First Backward Process 204 Second Forward Process 205 Second Backward Process 205 Perspective 205 Key Concepts 206

5 viii DECISION MAKING FOR LEADERS 11. Practical Examples of Conflict Resolution 207 Seeking a Better Way Out 208 Forward-Backward Conflict Resolution: Conflict in Northern Ireland 208 Forward-Backward Conflict Resolution: Logan Airport and the East Boston Community 218 Perspective Analyzing Benefit/Cost Decisions and Resource Allocation 222 How the Process Can Help 223 Problems of Benefit/Cost Analysis 224 Structuring Benefit/Cost Hierarchies 227 Resource Allocation 229 Perspective 230 Key Concepts Practical Examples of Benefit/Cost Analysis and Resource Allocation 232 Short-Term and Long-Term Decisions 233 Allocating Resources for an R&D Program 233 Deciding on a Home Computer 237 Selecting a Portfolio for a Corporation 241 Resource Allocation of Projects for a Multinational Corporation 253 Manpower Allocation 256 Perspective Making Group Decisions 262 Group Sessions: The Promise and the Problems 263 Conducting Group Sessions 263 Getting the Best Results 268 Using Questionnaires 269 Introducing the AHP in Your Organization 271 Perspective 271 Key Concepts A Practical Example of Group Decision Making 274 Working Toward Consensus 275 Setting Priorities for Health Care Research Projects 275 Perspective 289 Appendix - Decision Making, Scaling and Number Crunching 290 Abstract 290 Introduction 290

6 CONTENTS ix Expectations, Scales, and Manipulations 291 A General Approach to Ratio Scale Measurement 295 Summary 296 References 296 Some Observations on Scales and Consistency 297 References Index