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The AHP Method

The AHP Method. Multi Criteria Decision Making Most popular method AHP: Analytic Hierarchy Process Saaty 1975 See www.expertchoice.com Has been used in Iceland for ranking power plant alternatives by profitability and environmental impact. AHP.

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The AHP Method

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  1. The AHP Method • Multi Criteria Decision Making • Most popular method • AHP: Analytic Hierarchy Process • Saaty 1975 • See www.expertchoice.com • Has been used in Iceland for ranking power plant alternatives by profitability and environmental impact

  2. AHP • 1. Define all relevant criteria and do pairwise comparison for importance => weights Wi • 2. Define all relevant alternatives and do pairwise comparison against each criteria => scores Sij of each alternative for each criteria • 3. Check for consistency, revise if necessary • 4. Calculate weighted final score Fi = sum(i: Wi*Sij)

  3. The AHP comparison • 1 Equal • 3 Minor difference • 5 Certain difference • 7 Great difference • 9 Very great difference

  4. AHP Example: Locating an Aluminium Smelter in Iceland • Criteria: • Labour, community and service • Harbour, roads and infrastructure • Power, closeness to a power plant • Alternatives: • Keilisnes • Eyjafjörður • Reyðarfjörður • See Excel-document

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