A COMPARATIVE STUDY OF AHP AND DEA

The analytic hierarchy process (AHP) is a decision support system that accounts for the relative importance of objectives (decision-making units, DMUs) in a multiple-hierarchy structure. AHP uses pairwise comparisons to evaluate the relative importance (weight) of criteria. AHP again applies pairwise comparisons to evaluate the relative importance of DMUs by reference to each criterion and synthesizes them into a final importance ratio. In this process, all data are derived from the subjective judgements of decision-makers. On the other hand, DEA utilizes mainly existing data and evaluates relative efficiency scores of DMUs. In this chapter, we point out structural similarities between the two methods in the case of benefit/cost analysis and suggest potential trade-offs.