Decision support software for capital budgeting.

The Analytical Hierarchy Process (AHP), developed by Thomas Saaty, provides a decision analytic framework that can build on traditional capital budgeting decision models. The AHP improves the investment justification process by: 1. allowing the systematic consideration and evaluation of multiple decision criteria, 2. allowing managerial judgments to be included formally and systematically in the investment justification process, 3. enabling managers to focus on those aspects of the decision that need refinement or have the highest degree of uncertainty, and 4. supporting the growing movement toward group decision making in business. The AHP is basically operationalized through a sequential process of pairwise comparisons. These comparisons represent statements of managerial preferences in a forced-choice format. The AHP is illustrated in a hypothetical example using dedicated microcomputer software.

Main Author: Stout, David.
Other Authors: Liberatore, Matthew., Monahan, Thomas.
Format: Villanova Faculty Authorship
Language: English
Published: 1991
Online Access: