Comparative study of AHP and potential method in supplier selection decision making

Multi-Criteria Decision Making (MCDM) is used to tackle decision-making problem by evaluating and comparing different options based on several criteria. MCDM procedures need multiple inputs and generate outcomes as weights given to each options. Two commonly used MCDM methods are the Analytic Hierarchy Process (AHP) and the Potential Method (PM). AHP entails breaking down a decision problem into structured hierarchy, facilitating pairwise comparisons to determine weights for the options. On the other hand, PM utilizes a directed graph referred to as a preference structure, constructed via paired comparisons, to formulate a value function for the option. This study employs the Potential Method in a previously published case study of supplier selection that was analyzed earlier using the AHP. The objective is to analyse the outcomes from both methods, specifically focusing on the supplier’s rankings. The findings showed that both AHP and PM recognized Supplier D1 as the top option, followed by Supplier D2 and then D3. The overall ranking remained consistent despite minor variations in the final weight values. This suggests that the PM produce results similar to those of AHP in tackling MCDM problems. Additionally, PM enhanced interpretability via its graphical representation, which make it a useful complementary tool to the conventional AHP for managing complex decision-making situations.