1. Multi Criteria Decision Making
Goal Programming
MAUT, Multi Attribute Utility Theory, Keeney & Raiffa 1976
Europe: Electra (Roy et al.)
USA : AHP (Saaty)

2. Examples of many criteria
Location Planning
Equipment Selection
Supplier Selection
Evaluation of applicants
Ranking Projects
Environmental Evaluation

3. Environmental Evaluation Criteria
History
Animals
Vegetation
Water System
Landscape
Recreation

4. Analytic Hierarchy Process
Thomas Saaty 1975
Expert Choice Software
See
>1500 published references on AHP
Case Studies:
Location
Selecting suppliers
Job candidates evaluation

5. AHP, pros & cons Pros: Cons: Doable Pairwise Comparison
Consistency Index
Cons:
The AHP Scale (1-9)
Many alternatives

6. AHP methodology 1. Criteria are compared by importance => weights
2. Alternatives are scored against each criteria
3. Final index for each alternative is calculated from weights and scores

7. The AHP Scale 1 Equal importance 3 Moderately more important
5 Strongly more important
7 Very strongly more important
9 Extremely more important

8. Pairwise Comparison Wi = Weight of criteria i W2/W1 W2/W2 W2/Wn A =
Wn/W1 Wn/W2 Wn/Wn

9. Consistency Check 1. Compute A*w’ 2. M = (1/n)*i(A*w’)i/w’i
3. CI = (M – n)/(n – 1)
4. CI/RI > 0,1 => Inconsistency
where n =
=> RI = ,58 0,90 1,12 1,24 1,32 1,41

10. Pareto Efficient Frontier
NPV of Profit
Alt 2
Alt 5
Alt 3
Alt 4
Alt 1
Environment Impact Index

11. AHP Example: Locating an Aluminium Smelter in Iceland
Criteria:
Labour, community and service
Harbour, roads and infrastructure
Power, closeness to a power plant
Alternatives:
Keilisnes
Eyjafjörður
Reyðarfjörður
See Excel-document

12. Master Plan for Hydro and Geothermal Energy
Based on the best available scientific information
Open for democratic public involvement
Large number of proposed power projects were evaluated
Ministry of Industry, in co-operation with the Ministry of the Environment

13. Steering Committee supported by about 50 experts
Working Group I will evaluate what impact proposed power projects will have on Nature, landscape, geological formations, vegetative cover, flora and fauna, as well as cultural heritage and ancient monuments.
Working Group II will evaluate the impact on outdoor life, agriculture, revegitation, fishing in rivers and lakes, and hunting.
Working Group III will evaluate the impact proposed power projects can have on economic activity, employment and regional development.
Working Group IV will identify potential power projects, both hydro and geothermal, and carry out technical as well as economic evaluation of the projects.