A COMPARISON BETWEEN TWO MULTIATTRIBUTE DECISION METHODOLOGIES USED IN CAPITAL INVESTMENT DECISION ANALYSIS

Two multicriteria decision methodologies applied to evaluating capital investments are the Analytic Hierarchy Process (AHP) and the Non-Traditional Capital Investment Criteria (NCIC) model. In this paper we demonstrate that a mathematical relationship exists between these two models. In-particular,...

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Bibliographic Details
Published in:The Engineering economist 1997-01, Vol.42 (3), p.179-202
Main Authors: BOUCHER, THOMAS O., GOGUS, OZERK, WICKS, ELIN M.
Format: Article
Language:English
Subjects:
Advanced manufacturing technologies
Automation
Capital budgeting
Capital investments
Comparative studies
Costs
Data collection
Decision analysis
Decision making
Hierarchies
Manufacturing
Methods
Software
Statistical methods
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Summary:Two multicriteria decision methodologies applied to evaluating capital investments are the Analytic Hierarchy Process (AHP) and the Non-Traditional Capital Investment Criteria (NCIC) model. In this paper we demonstrate that a mathematical relationship exists between these two models. In-particular, a data set obtained by one method can be mapped into an equivalent data set obtained using the other method. It is suggested that this offers an opportunity of empirically assessing decision makers judgmental capabilities under varying data collection methods. An example problem illustrates the manner in which such comparisons can be made.
ISSN:0013-791X
1547-2701
DOI:10.1080/00137919708903178