Multi-Criteria Analysis in Circular Economy Principles: Using AHP Model for Risk Assessment in Sustainable Whisky Production

Abstract

As the whisky industry applies circular economy principles to maximize resource utilization and minimize environmental impact, companies become exposed to several risks, which require complex assessments to ensure reliable outcomes. This study provides an organized framework to identify, prioritize, and rank various risk factors commonly observed in the whisky industry through the development of an analytical hierarchy process (AHP) multi-criteria analysis model. Experts from 18 small European distilleries identified five main risk criteria and nineteen sub-criteria from brainstorming workplace observations and categorized them as: environmental (5), operational (4), technological innovation (3), food safety (3), and economical (4) risks. The analytical hierarchy process (AHP) approach was used to determine the weights and ranks of the main criteria and sub-criteria based on the survey responses received from experts from each distillery. The final judgements are consistent, as indicated by consistency values (CR) of less than 0.1 for all risk criteria. Unlike traditional risk assessment methods, the AHP model effectively integrates qualitative and quantitative data, aiding strategic decision making in the whisky industry by breaking down complex problems into manageable sub-problems. Future research directions may expand the criteria and explore additional sustainable practices.

Keywords

• risk assessment
• multi-criteria analysis
• analytical hierarchy process (AHP)
• circular economy (CE)
• sustainable whisky production