A new case of rank reversal in analytic hierarchy process due to aggregation of cost and benefit criteria

Abhijit Majumdar, Manoj Kumar Tiwari, Aastha Agarwal and Kanika Prajapat

Operations Research Perspectives, 2021, vol. 8, issue C

Abstract: Rank reversal in Analytic Hierarchy Process (AHP) due to introduction or removal of a new alternative is well documented in literature. However, rank reversal due to the aggregation of benefit and cost criteria has not been addressed with requisite rigour. This paper demonstrates a new type of rank reversal in AHP which can arise due to the method (ratio or difference) and approach (sum 1 or sum 2) used to aggregate the benefit and cost criteria. Numerical examples, mathematical analyses and computer simulations have been used for demonstration of results. It is found that considering the benefit and cost criteria separately (sum 2 approach) while aggregating them can yield irrational ranking. It is also demonstrated that ratio method of aggregation is untenable in additive variants of AHP as it yields identical ranking in sum 1 and sum 2 approaches. Difference method of aggregation considering the benefit and cost criteria together (sum 1 approach) is most logical and sound in additive variants of AHP. The results also counter the notion that multiplicative AHP is immune to rank reversal between ratio and difference methods of aggregation. Besides, sum 1 and sum 2 approaches produce different raking of alternatives in multiplicative AHP irrespective of the method of aggregation. Outcome of this research will be helpful while choosing the appropriate method and approach for aggregation of benefit and cost criteria in different variants of AHP.

Keywords: Analytic hierarchy process (AHP); Benefit and cost criteria; Multi-criteria decision making; Multiplicative AHP; Rank reversal; Revised AHP (search for similar items in EconPapers)
Date: 2021
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Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:oprepe:v:8:y:2021:i:c:s2214716021000087

DOI: 10.1016/j.orp.2021.100185

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