Using AHP for resource allocation problems

Analytic hierarchy process (AHP) has been used for solving multi-criteria resource allocation problems by converting them into equivalent single objective, maximization-type LP problems. At least two approaches can be identified for such applications. In the first approach, the AHP priorities are used as coefficients in the objective function of the LP format, and in the second approach, the benefit–cost ratios are used as the coefficients. This paper evaluates the two approaches. It is shown here that both the approaches are suitable if the criteria (used in the AHP model) are sought to be maximized. However, they are shown to be inappropriate if the criteria are sought to be minimized. A new, simple approach is suggested for the latter case and an extension has been proposed to tackle problems with mixed criteria. The implications of the study on other preference elicitation methods have also been pointed out.