A statistical framework for strategic decision making with AHP: Probability assessment and Bayesian revision

A probability assessment framework is outlined for an organizational decision involving a conditioning event (CE). The decision may, for example, involve a new‐product launch (strategic decision) dependent on the outcome of market research (CE). The framework illustrates how Bayesian revision could be employed as related ‘news’ arrives intermittently to revise current probabilities prior to decision implementation. A unique contribution of this paper is its utilization of the analytic hierarchy process to ascertain a set of consistent and coherent probabilities for the event/sample spaces at all stages of the decision process.