The Significance Test on the AHP-based Alternative Evaluation: An Application of Non-Parametric Statistical Method

Joonsoo Park, Sung-Chul Kim

Abstract


The method of weighted sum of evaluation using AHP is widely used in feasibility analysis and alternative selection. Final scores are given in forms of weighted sums and the alternative with largest score is selected. With two alternatives, as in feasibility analysis, the final score greater than 0.5 gives the selection but there remains a question that how large is large enough. KDI suggested a concept of ‘grey area’ where scores are between 0.45 and 0.55 in which decisions are to be made with caution, but it lacks theoretical background. Statistical testing was introduced to answer the question in some studies. It was assumed some kinds of probability distribution, but did not give the validity on them. We examine the various cases of weighted sum of evaluation score and show why the statistical testing has to be introduced. We suggest a non-parametric testing procedure which does not assume a specific distribution. A case study is conducted to analyze the validity of our suggested testing procedure. We conclude our study with remarks on the implication of analysis and the future way of research development.


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References


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