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The analytical hierarchy process for eliciting decision preferences in asset management
http://irc.nrc-cnrc.gc.ca
T he Ana lyt ic a l hie ra rchy proc e ss for
e lic it ing de c ision pre fe re nc e s in a sse t
m a na ge m e nt
N R C C - 4 7 7 2 1
T e s f a m a r i a m , S . ; V a n i e r , D .
A version of this document is published in / Une version de ce document se trouve dans :
Infra 2005 Urban Infrastructure : Managing the Assets, Mastering the Technology, Montreal, QC., Nov. 21-23, 2005, pp. 1-34
An Abstract on
The Analytical Hierarchy Process for
Eliciting Decision Preferences in Asset Management
Solomon Tesfamariam
Institute for Research in Construction, National Research Council Canada, Ottawa, Ontario Canada K1A 0R6
Tel: (613)-993-2448; Fax: (613)-954-5984 e-mail: Solomon.Tesfamariam@nrc-cnrc.gc.ca
and
Dana Vanier
Institute for Research in Construction, National Research Council Canada, Ottawa, Ontario Canada K1A 0R6
Tel: (613)-993-9699; Fax: (613)-954-5984 e-mail: Dana.Vanier@nrc-cnrc.gc.ca
for
Infra 2005
Urban Infrastructure: Managing the Assets, Mastering the Technology Montreal, Quebec, November 2005
ABSTRACT: There is an increasing awareness in asset management to make use of numerical optimization techniques as a decision support system. In the Municipal Infrastructure Investment Planning (MIIP) project, multi-objective optimization (MOO) is carried out using three parameters (performance, life cycle cost, and risk of failure) to prioritize rehabilitation projects. In addition, for each rehabilitation project there are typically six alternative solutions ranging from “complete replacement” to “do nothing”. However, the rehabilitation prioritization should also incorporate the decision maker’s preferences towards the three-optimization parameters and the six rehabilitation
alternatives, as their relative importance should influence the final decision. In this paper, the analytical hierarchical process (AHP) is utilized to elicit decision-making preferences from stakeholders, and to compute the corresponding relative weights of their decision preferences towards the rehabilitation alternatives and the MOO parameters. The decision making approach of the various MIIP consortium project participant are highlighted and discussed. The potential applications of the AHP weights in the optimization problem are highlighted with examples.
The Analytical Hierarchy Process for Eliciting
Decision Preferences in Asset Management
Solomon Tesfamariam
and
Dana Vanier
I nstitute for Research in Construction
Outline
• Background
• Decision Support System
• Analytical Hierarchy Process (AHP)
• Case Study
Background
• This research is supporting MIIP project (Monday presentation)
– To develop prototype software for decision support• Current state of our infrastructure
– MIIP Survey on Municipal Infrastructure Assets
• http://irc.nrc-cnrc.gc.ca/fulltext/b5123.2/b5123.2.pdf
– Survey results (67 municipalities across Canada)
• 77% want to see maintenance funding at recommended 2% to 4% “Level of Investment” for maintenance each year
– 70% are spending less than 2%
– “Actual” average is 1.4% and the “desired” is 2.3%
…background
• Practitioners need for Decision Support System (DSS)
– Open Forum on Research Opportunities in Asset Management• http://irc.nrc-cnrc.gc.ca/fulltext/b5123.12/b5123.12.pdf
• Research and knowledge acquisition
– GAP: dearth of tools to perform integrated asset management
– OPPORTUNITY: creation of “toolbox” of standard software methods
• IRC’s Strategic Objectives
– “Provide integrated decision-making tools that enable the construction sector to respond to changing performance expectations”
…background
• How do we incorporate asset management principles?
– What do you own?– What is it worth ? – What is deferred ?
– What is the condition ?
– What is remaining service life ? – What do you fix first ?
…background
• Capital and maintenance project prioritization is complex
– Municipal Objectives (Sometimes conflicting)– Technical Performance – Levels of Service
– Risk of Failure (Consequence, Probability)
– Intervention Alternatives (Do Nothing … Maintain … Replace) – Project Cost
– Life Cycle Costs
– Discipline Choices (Roads, Sewer, Bridges, etc.) – Political
– Financial
…background
• Many high-level asset management decisions are subjective
• They are based on poor, or little, data
– Condition data (not consistent or available for all disciplines) – Risk data (qualitative, and not quantified or objective)
– Life cycle costs (only initial costs)
• This will change in future with effective asset management and
decision support systems
Decision support system
• Various definitions and context dependent:
– A computer-based system that aids the process of decision making.
– An information and planning system that provides the ability to interrogate computers on an ad hoc basis, analyze information and predict the impact of decisions before they are made. (ref. Wikipedia)
• Multicriteria decision making:
– Multiple objective programming approach – Value and utility theory approach (e.g., AHP) – Group decision and negotiation theory
Analytical Hierarchy
Process (AHP)
•
AHP is introduced in the 70s by Prof. Saaty
•
AHP is not widely used in infrastructure field
•
“Strategic implementation of infrastructure priority projects: case study
in Palestine”
– ASCE Journal of Infrastructure Systems Vol 8(1)
•
“AHP as a Tool for Infrastructure Management,” case studies
– Selection of concrete mixtures
– Maximizing customer benefits in pavement management – Transportation Research Board (Jan 2006)
…AHP
• Structuring of a problem into a hierarchy consisting of a goal
and subordinate features
• Establishing pairwise comparisons between elements (criterion)
at each level, and
• Synthesis and establishing the overall priority to rank the
alternatives.
…AHP
• Capital and maintenance project prioritization is complex
– Municipal Objectives (Sometimes conflicting)– Technical Performance – Levels of Service
– Risk of Failure (Consequence, Probability)
– Intervention Alternatives (Do Nothing … Maintain … Replace) – Project Cost
– Life Cycle Costs
– Discipline Choices (Roads, Sewer, Bridges, etc.) – Political
– Financial
…AHP:
structuring a problem
Assessment criteria
Condition
Risk
Cost
Project ranking
Intervention alternatives
Do nothing Maintenance Minor repair Major repair Renewal
Road
Sewer Water
…AHP:
pairwise comparisons
• In making “general asset management” decision,
– What is the level of influence (or dominance) of condition to risk? – What is the level of influence (or dominance) of condition to cost? – What is the level of influence (or dominance) of risk to cost?
…AHP:
pairwise comparisons
Intensity
importance Definition Explanation
1 Equal importance Two activities contribute equally to the objective
2 Weak or slight
3 Moderate importance
Experience and judgment slightly favor one activity over another
4 Moderate plus
5 Strong importance Experience and judgment strongly favor one activity over another
6 Strong plus
7 Very strong or demonstrated
An activity is favoured very strongly over another; its dominance demonstrated in practice
8 Very, very strong
9 Extreme importance
The evidence favouring one activity over another is of the highest possible order of affirmation 1 2 3 4 5 6 7 8 9 2 3 4 5 6 7 8 9 Condition Risk 1 2 3 4 5 6 7 8 9 2 3 4 5 6 7 8 9 Condition Cost 1 2 3 4 5 6 7 8 9 2 3 4 5 6 7 8 9 Risk Cost
AHP weight
Condition Risk Cost 0.12 0.20 0.68Case study
• City of Hamilgaryton
– Four road projects
– Four sewer projects
– Four water projects
– Four bridge projects
…case study
Sewers Current Conditon Current replacement value
S1 4 $200,000
S2 3 $100,000
S3 2 $150,000
S4 5 $200,000
Roads Current Conditon Current replacement value
R1 5 $400,000
R2 4 $200,000
R3 3 $300,000
R4 2 $400,000
Water Current Conditon Current replacement value
W1 3 $200,000
W2 2 $100,000
W3 5 $150,000
W4 4 $200,000
Bridges Current Conditon Current replacement value
B1 2 $100,000
B2 5 $50,000
B3 4 $75,000
…case study:
4 Scenarios
• Scenario 1: Little information is provided
(typical municipal situation)
• Scenario 2: Extra risk and condition data are provided
• Scenario 3: Extra risk and condition data are provided in a
graphical format
…case study:
scenario 3
1 1.5 2 2.5 3 3.5 4 4.5 $0 $200,000 $400,000 $600,000 $800,000 $1,000,000 $1,200,000 $1,400,000…case study:
interventions
Roads R1 R2 R3 R4 Durham 1 3 4 4 DND 1 1 3 4 Prince george 1 1 2 5 Regina 1 1 3 4 Halton 1 3 4 4 Ottawa 1 1 3 4 Sewers S1 S2 S3 S4 Durham 3 4 5 1 DND 2 3 4 1 Prince George 2 2 4 1 Regina 2 3 4 1 Halton 2 4 4 1 Ottawa 2 3 4 1 Water W1 W2 W3 W4 Durham 4 5 1 3 DND 2 3 1 2 Prince george 2 3 1 2 Regina 2 3 1 2 Halton 4 5 1 2 Ottawa 3 3 1 1 Complete Replacement (1) Major Repairs (2) Minor Repairs (3) Preventive Maintenance (4) Doing Nothing (5)(scenario 2)
Bridges B1 B2 B3 B4 Durham 4 1 3 4 DND 2 1 1 3 Prince george 3 1 1 2 Regina 3 1 1 2 Halton 4 1 2 4 Ottawa 4 1 1 2…case study:
scenario 4 (AHP)
Assessment criteria
Condition
Risk
Cost
Project ranking
Intervention alternatives
Do nothing Maintenance Minor repair Major repair Renewal
Road R1 R2 R3 R4 Sewer S1 S2 S3 S4 Water W1 W2 W3 W4 Project Bridges B1 B2 B3 B4