Ranking Construction Project Alternatives with the Analytic Network Process Method

In evaluating construction investments, public or private sector owners often have several project alternatives, e.g. different sites for development and different types of building. Assessing each of them so as to identify the best for implementation is owners’ most important decision in the project planning stage. The traditional net present worth method has difficulty in including intangible benefits and risks, so the result of it may not represent the overall value of an alternative. The multi-attribute utility theory method can include all factors in producing a total utility score for an alternative, but it has difficulty in determining criteria weights and utility functions. The analytic hierarchy process method can derive criteria weights and priority scores of alternatives from paired comparisons, but it cannot incorporate feedback relations between criteria and alternatives as it is done hierarchically in a top-down manner. This paper proposes an improved model for assessing project alternatives using the analytic network process method as the generalized analytic hierarchy process method to include the feedback impacts absent from the analytic hierarchy process. To illustrate the model, three recent housing projects in Kaohsiung, Taiwan were used as hypothetical alternatives being considered by a medium developer. A study of related factors that influenced their economics as well as feedback relations between factors and alternatives were conducted to determine the criteria and the dependency links in the network model. Based on company and project conditions, values of inputs for the model were set and were processed to produce the criteria weights and the relative scores of the alternatives for establishing their priority ordering. The ANP model results in changes in the ranking of the sites from those produced by the AHP method due to the additional relations.