APPLICATION OF THE ANALYTICAL HIERARCHY PROCESS (AHP) IN DECISION-MAKING IN INTEGRATION AND PARTNERSHIP PROJECTS
Abstract
The article defines that formation of long-term effective partnerships between business entities is one of the forms of their integration. Integration of enterprises, as a complex process, is determined by a number of stages, each of which requires effective management decisions. The key in this context is the selection and evaluation of potential partners. It is determined that the method of hierarchy analysis (AHP) by Thomas L. Saati can be an effective tool for an objective and mathematically accurate assessment of potential partners in situations of multi-criteria choice. The article reveals the essence of the method, its stages of application and advantages in the context of managerial decisions. The main stages of the method include: building a hierarchy, identifying alternatives and criteria, determining the importance of each criterion and making pairwise comparisons, building a matrix of pairwise comparisons, determining weights, ensuring consistency, aggregation and selecting the optimal option. A specific example of calculations carried out using the method is given when choosing a partner for the integration of a dairy processing enterprise with a supplier of raw materials. The article substantiates the criteria for assessing a milk supplier, including: product quality, territorial proximity of the supplier, the level of harmonisation of economic interests, the availability of potential for increasing production capacity, and integration costs. To demonstrate an example of application of the method, numerical estimates of the matrix of pairwise comparisons for the evaluation criteria are presented. Pairwise comparisons of the relative priority of dairy raw material suppliers for further integration for each criterion based on the methodology AHP are presented. This made it possible to determine the priority vector and the result of a weighted assessment reflecting the supplier's rating. The article highlights the practical aspect of using the method for optimal management decision-making in the business environment.
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