BOCR multi level ANP models
- 1. The SUPER DECISIONSSoftware The Analytic Network Process for decision making with dependence and feedback By Creative Decisions Foundation 4922 Ellsworth Avenue Pittsburgh, PA 15213 Phone: 412-621-6546 Fax: 412-681-4510 1
- 2. The Parts ofa Complex ANP Model with Benefits, Opportunities, Costs and Risks • Top level network with the merit nodes: benefits, opportunities, costs and risks • Subnets (4) beneath each merit node containing control criteria hierarchies for each merit • Subnets for each of the high priority control criteria. There may be as many as 10 or 12 of these. 2
- 3. Concepts Important inthe ANP 1. Benefits, Opportunities, Costs and Risks (the merits of the decision) 2. Control Criteria Hierarchies (for each merit) 3. Decision subnets containing the alternatives for the high priority control criteria 4. Strategic Criteria introduced at the end of 3 the process to prioritize the BOCR nodes
- 4. Benefits, Opportunities, Costsand Risks Top-level Network 4
- 5. Hierarchy of ControlCriteria for each Merit Node • Create or access the subnet of a merit node by right-clicking it to select Make/Show Subnet •Control criteria subnets have a goal cluster with a goal node, a criteria cluster with criteria nodes and perhaps subcriteria in other clusters. •The criteria are connected to the goal (and subcriteria to criteria) • Pairwise compare criteria and subcriteria, pick high priority control criteria and build decision 5 subnets for them
- 6. Benefits Control HierarchySubnet .8333 .1667 6
- 7. Opportunities Control Hierarchy .25 .75 7
- 8. Costs Control Hierarchy .8333 .1667 8
- 9. Risks Control Hierarch .75 .25 9
- 10. There is aDecision Subnet for each Benefit Control Criterion; the one for Economic Benefits is shown below 10
- 11. Perform all PairwiseComparisons, e.g.: What is most important Operational Criterion for “Outsource All Application Development Work” 11
- 12. Results of allpairwise comparisons are arranged in unweighted supermatrix 12
- 13. Pairwise compare theclusters connected from a cluster for influence on that cluster. 13
- 14. Multiply values inUnweighted SuperMatrix Components by corresponding Cluster Matrix Value to get Weighted Supermatrix. Example: All 9 numbers in (Financial, Alternatives) component of unweighted supermatrix are multiplied by .833 from (Financial,Alternatives) cell in the Cluster matrix to yield values in (Financial, Alternatives) component in weighted supermatrix below. All columns then sum to 1 in weighted supermatrix. 14 =1
- 15. The Weighted Supermatrixconverges to the Limit Supermatrix All columns may be the same in the limit matrix, although not always the case. Synthesized results for alternatives come from raw values in limit supermatrix 15
- 16. Synthesized results inEconomic Benefits Decision Subnet Alternatives under Economic Benefits Ideals Normals Raw 1 Outsource all application development work 1.0000 0.6962 0.3427 2 Outsource the design and programming phases 0.2766 0.1926 0.0948 3 Do not outsource any application development work 0.1597 0.1112 0.0548 16
- 17. Synthesized results inTechnological Benefits Decision Subnet Alternatives under Technological Benefits Ideals Normal Raw 1 Outsource all application development work 1.0000 0.4411 0.2189 2 Outsource the design and programming phases 1.0000 0.4411 0.2189 3 Do not outsource any application development work 0.2669 0.1178 0.0584 17
- 18. Combining Economic and Technologicalto get overall Benefits Weight Economic by .833 and Technological by .167 and add to obtain: Alternatives under Benefits Overall Ideals Normals Raw 1 Outsource all application development work 1.0000 0.6350 1.0000 2 Outsource the design and programming phases 0.3972 0.2522 0.3972 3 Do not outsource any application development work 0.1776 0.1128 0.1776 18
- 19. Results under Benefits, Opportunities, Costs and Risks Positive Negative Benefits Oppor. Costs Risks Alternatives Ideals Ideals Ideals Ideals 1 Outsource all application development work 1.0000 1.0000 0.8518 1.0000 2 Outsource the design and programming phases 0.3972 0.8277 0.7653 1.0000 3 Do not outsource any application development work 0.1776 0.4908 1.0000 0.3570 19
- 20. Weight the BOCRby rating the top alternative for each merit against the Strategic Criteria 20
- 21. Rating the BOCR Whatis the highest valued alternative for Benefits? To determine what it is synthesize in the Benefits control subnet which will rank the Alternatives under Benefits. Keep that highest alternative in mind and perform ratings across the Benefits row as to how it impacts the strategic criteria. Repeat across the Opportunities row for Opportunities’ highest valued alternative…and so on. For Costs and Risks the highest valued alternative will be the worst one so you will be rating by asking the question “How does this worst alternative for Costs (Risks) impact the strategic criteria?” 21
- 22. Final Step isto Combine the BOCR Using a Formula 1. Additive negative formula – generally best for long term results: bB+oO-cC-rR 2. Multiplicative formula – equivalent to marginal cost/benefit analysis and generally best for short term results: BO/CR 22
- 23. Combine BOCR resultsusing Additive (negative) formula: bB+oO-cC-rR 23
- 24. To change formulause the Design > Formula command 24
- 25. This is theAdditive (negative) formula as the software expresses it 25
- 26. Combine BOCR resultsusing Multiplicative formula: BO/CR 26
- 27. When to usewhat formula • Additive (negative) gives best alternative for the long-term • Multiplicative gives the best alternative for the short-term • In practice one usually looks at both. Often they give the same best alternative, but not always. • Not possible to do sensitivity for multiplicative formula as the b,o,c and r cancel out. 27
- 28. Performing Sensitivity onthe BOCR Nodes • Select the Additive (negative) formula using the Design>Sensitivity command • Select Computations>Sensitivity • Select Edit>Independent Variable (the initial graph is usually not the one you want – because the software starts with the first node in alphabetical order as the independent variable). You need to select the correct Independent Variable (to do sensitivity for the Risks, for example, choose Risks) 28
- 29. Set the SensitivityParameters • Click on the node “Priority: 1 Availability of …” to select it, then select Edit to get to the Edit Parameter dialogue box. Change the Wrt Node to Risks. 29
- 30. Parameter Settings forRisks Sensitivity • In the Edit Parameter dialogue box set the Parameter Type to 0 for priorities and the Network to 0 for the top-level network (it is the bottom position as shown below – there is no name on it) and select Risks for the Wrt (with respect to) Node. 30
- 31. Display the SensitivityGraph • Click the Done button then the Update button to display the graph shown below • As the priority of Risk increases above about 40% the best option changes from Outsource All to Do Not Outsource The “with respect to” variable is shown at the bottom 31
- 32. Investigate Sensitivity forthe other nodes: Benefits and Costs shown below Benefits Costs 32