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Using an Analytic Hierarchy Process to develop a scoring system for a set of continuous feasible alternatives in negotiation

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  • Jakub Brzostowski
  • Ewa Roszkowska
  • Tomasz Wachowicz

Abstract

The use of an Analytic Hierarchy Approach (AHP) for scoring offers in continuous negotiation problems has been studied. AHP has already proven its usefulness in constructing a ranking of alternatives in discrete decision making problems. In negotiations, however, some issues may have a quantitative character and be defined by feasible ranges, which results in uncountably large sets of feasible offers. This is a problem to which AHP cannot be applied in its original form. Therefore we propose an approach to building a scoring system that operates within AHP and a predefined discrete subset of feasible alternatives, then a method for determining global scores for all the feasible alternatives is proposed. When this subset has been built, the notion of border alternatives is applied. Assuming that these border alternatives have been ranked, single-issue utility functions are constructed using linear interpolation over the set of selected border alternatives. Single-issue utility functions are then aggregated using issue weights in order to form the final utility function. The issue weights are also determined using AHP. Such an approach means that a relatively small number of comparisons are required for a negotiator in AHP process to build a comprehensive scoring system, which makes the process of eliciting the negotiator’s preferences simple and rapid.

Suggested Citation

  • Jakub Brzostowski & Ewa Roszkowska & Tomasz Wachowicz, 2012. "Using an Analytic Hierarchy Process to develop a scoring system for a set of continuous feasible alternatives in negotiation," Operations Research and Decisions, Wroclaw University of Science and Technology, Faculty of Management, vol. 22(4), pages 21-40.
    • Handle: RePEc:wut:journl:v:4:y:2012:p:21-40:id:1039
    DOI: 10.5277/ord120402
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    References listed on IDEAS

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    1. Vaidya, Omkarprasad S. & Kumar, Sushil, 2006. "Analytic hierarchy process: An overview of applications," European Journal of Operational Research, Elsevier, vol. 169(1), pages 1-29, February.
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    4. Ho, William, 2008. "Integrated analytic hierarchy process and its applications - A literature review," European Journal of Operational Research, Elsevier, vol. 186(1), pages 211-228, April.
    5. Saaty, Thomas L., 1994. "Highlights and critical points in the theory and application of the Analytic Hierarchy Process," European Journal of Operational Research, Elsevier, vol. 74(3), pages 426-447, May.
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