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Working paper

Criteria importance theory for decision making problems with a hierarchical criterion structure

Podinovski, Podinovskaya O. V.
Hierarchical structures are frequently used to formalize complex multicriteria decision analysis problems. The analytic hierarchy process (AHP) of Saaty (1980) is an established method used to solve practical multicriteria problems of the hierarchical nature. It is also well-known that AHP, and its modifications and generalizations poses a number of fundamental drawbacks that cannot in principle be overcome. The main drawbacks are the independence of the evaluation procedure of the criteria importance from the normalization of criterion values – this violates the requirement of the mathematical theory of measurement, and the lack of a formal definition of the notion of criteria importance. Furthermore, the use of ratio scales in AHP for the expression of importance of criteria is theoretically unsubstantiated. We suggest a new methodology suitable for the analysis of multicriteria problems with hierarchical structures. It is based on criteria importance theory.