Prioritizing Project Risks Using AHP
- ORNL
This essay introduces the Analytic Hierarchy Process (AHP) as a method by which to rank project risks, in terms of importance as well as likelihood. AHP is way to handle quantifiable and/or intangible criteria in the decision making process. It is a multi-objective multi-criteria decision-making approach that is based on the idea of pair-wise comparisons of alternatives with respect to a given criterion (e.g., which alternative, A or B, is preferred and by how much more is it preferred) or with respect to an objective (e.g., which is more important, A or B, and by how much more is it important). This approach was pioneered by Thomas Saaty in the late 1970's. It has been suggested that a successful project is one that successfully manages risk and that project management is the management of uncertainty. Risk management relies on the quantification of uncertainty which, in turn, is predicated upon the accuracy of probabilistic approaches (in terms of likelihood as well as magnitude). In many cases, the appropriate probability distribution (or probability value) is unknown. And, researchers have shown that probability values are not made very accurately, that the use of verbal expressions is not a suitable alternative, that there is great variability in the use and interpretation of these values and that there is a great reluctance to assign them in the first place. Data from an ongoing project is used to show that AHP can be used to obtain these values, thus overcoming some of the problems associated with the direct assignment of discrete probability values. A novel method by which to calculate the consistency of the data is introduced. The AHP approach is easily implemented and, typically, offers results that are consistent with the decision maker's intuition.
- Research Organization:
- Oak Ridge National Lab. (ORNL), Oak Ridge, TN (United States)
- Sponsoring Organization:
- USDOE Office of Science (SC)
- DOE Contract Number:
- AC05-00OR22725
- OSTI ID:
- 931067
- Resource Relation:
- Conference: PMI Global Congress North America 2007, Atlanta, GA, USA, 20071007, 20071007
- Country of Publication:
- United States
- Language:
- English
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