Are MCDM methods useful? A critical review of Analytic Hierarchy Process (AHP) and Analytic Network Process (ANP)

Abstract

Although Multi Criteria Decision Making (MCDM) methods have been applied in numerous case studies, many companies still avoid employing these methods in making their decisions and prefer to decide intuitively. There are studies claiming that MCDM methods provide better rankings for companies than intuitive approaches. This study argues that this claim may have low validity from a company’s perspective. For this purpose, it focuses on one of the MCDM methods referred to as the Analytic Hierarchy Process (AHP) and shows that AHP is very likely to provide a ranking of options that would not be acceptable by a rational person. The main reason that many companies do not rely on current MCDM methods can be due to the fact that managers intuitively notice ranking errors. Future studies should end the promotion of outdated approaches, pay closer attention to the deficiencies of the current MCDM processes, and develop more useful methods.

Keywords

• multiple criteria decision analysis
• ahp
• anp
• mcdm methods