page_title: Analytic hierarchy process – car example
section_title: Resale value
hierarchical_section_title: Analytic hierarchy process – car example / Pairwise comparing the Alternatives with respect to the Criteria / Resale value
caption_attribution_description: Part of a series of images to illustrate an article on the Analytic Hierarchy Process
context_page_description: This is a worked-through example showing the use of the analytic hierarchy process in a practical decision situation.
  See Analytic hierarchy process#Practical examples for context for this example.
context_section_description: When the family researched Resale Value, they learned that lending institutions keep statistics on the market value of different models after various time periods. These estimated "residual values" are used for leasing, and are typically based on a limit of 12,000 miles (19,000 km) driven per year. Actual residual values depend on the condition of the car, and can vary with market conditions.
  The Joneses are going to buy their car, not lease it, and they expect to drive it more than 12,000 miles per year, but they agree among themselves that the leasing figures are a good basis on which to compare the alternatives under consideration. Their bank gave them this table showing the residual value of each alternative after four years and 48,000 miles (77,000 km):
  As they look at the table of residual values, they see that the residual value of a CR-V is 25% higher than that of a Pilot (0.55 is 125% of 0.44). They reason that such a greatly higher residual value is an indication of a better or more desirable car, so they want to place a premium on cars with relatively high residual value. After some thought and discussion, they decide that, when comparing residual values, they want to look at the higher one as a percentage of the lower, and assign their intensities on that basis. Where one model has a residual value that is less than 105% of another, they consider the residual values as equal for all practical purposes. Where one model has a residual value that is 125% of the residual value of another, they consider the former model as quite strongly more important, desirable, valuable, etc., as indicated by its much higher resale value. With a bit more thought and discussion, they decide to make their judgments on this basis:
  They realize that not every family would do it this way, but this way seems best for them. This table shows the judgments they will enter for their Resale Value comparisons:
  When the judgments shown above are entered, the AHP software returns the following priorities for the six alternatives with respect to Resale Value:
  The local priorities show how much the resale value of each model contributes to the Subcriterion of Resale Value. The global priorities show how much the resale value of each model contributes to the overall goal of choosing the best car for the Jones family.
caption: Resale Value comparisons entered by the Jones family. They are based on the rationale shown above.
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