Application and development of the Fuzzy Analytic Hierarchy Process within a Capital Investment Study

Capital budgeting as a decision process is amongst the most important of all management decisions. The importance (consequents) of the subsequent outcome may bring a level of uncertainty to the judgement making process by the decision maker(s), in the form of doubt, hesitancy and procrastination. This study considers one such problem, namely the choice of type of fleet car to adopt by a small car hire company, a choice that accounts for a large proportion of the company’s working capital. With a number of criteria to consider, a fuzzy analytic hierarchy process (FAHP) analysis is undertaken to accommodate for the possible inherent uncertainty. Developments are made to the FAHP method utilised, to consider the preference results with differing levels of imprecision in the pairwise judgements made.