Decision Making Techniques Decision Making Term Paper

Write down the letter of the more important option in the cell, and score the difference in importance from 0 (no difference) to 3 (major difference). 5. Finally, consolidate and sum the results by adding up the total of all the values for each of the options; and then convert these values into a percentage of the total score.

As a simple example, a business is looking at several ways to expand its market share. In doing so, it comes with the following options as shown below:

1. Use electronic commerce for serving customers

Expand business in home markets

3. Improve customer satisfaction

4. Improve the quality of service

Firstly the manager draws up the Paired Comparison Analysis table in Figure 1:

Figure 1: Example Paired Comparison Analysis Table (not filled in):

Use electronic commerce (a)

Expand into home markets (B)

Improve customer

Satisfaction

Improve the quality of service

D)

Now manager compare options, writes down the letter of the most important option, and scores their difference in importance. An example of it is shown in figure 2:

Figure 2: Example Paired Comparison Analysis Table (filled in):

Use electronic commerce (a)

Expand into home markets (B)

Improve...

...

values, and converts each into a percentage of the total. This gives these totals:
So the most important decision is either to use electronic market or to improve customer satisfaction as both have 40% score.

WHEN USE the PAIRED COMPARISION ANALYSIS

Paired Comparison Analysis is a good way of weighing up the relative importance of different courses of action. It is useful where priorities are not clear, or are competing in importance. This technique is also useful when quantitative objective data are not available. This technique, however, is nit well suited where the priorities of decision makers are not clear cut (Carlsson and Walden, 1995).

Sources Used in Documents:

References

Carlsson, C. And Walden. P. (1995). AHP in political group decisions: A study in the art of possibilities. Interfaces 25:14-29.

Saaty, T.L. (1990). Multicriteria decision making: The analytic hierarchy process. RWS Publications, Pittsburgh.


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