Table Of ContentInternational Series in
MODERN APPLIED MATHEMATICS AND COMPUTER SCIENCE
General Editor: Ε. Y. RODIN
Volume 7
Related Pergamon Titles
Books
Earlier Volumes in the Series
L. COOPER and M. W. COOPER
Introduction to Dynamic Programming
T. L. SAATY and J. M. ALEXANDER
Thinking with Models
R. SURI
Resource Management Concepts for Large Systems
R. BELLMAN et al.
Mathematical Aspects of Scheduling and Applications
N. CERCONE
Computational Linguistics
M WITTEN
Hyperbolic Partial Differential Equations (Populations, Reactors, Tides and Waves:
Theory and Applications)
Also of interest
A. AULIN
The Cybernetic Laws of Social Progress
G. CHADWICK
A Systems View of Planning, 2nd edition
C. EDEN et al.
Messing about in Problems
A. FALUDI
Planning Theory
I. STAHL
Operational Gaming
R. TOMLINSON and I. KISS
Rethinking the Process of Operational Research and Systems Analysis
Journals
Computers and Mathematics with Applications
Computers and Operations Research
Computers, Environment and Urban Systems
Journal of the Operational Research Society
Long Range Planning
Progress in Planning
Systems Research
Transportation Research
Full details of all Pergamon publications I free specimen copy of any Pergamon journal available on
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Analytical Planning
The Organization of Systems
by
THOMAS L. SAATY
Graduate School of Business,
University of Pittsburgh, Pittsburgh, Pennsylvania, USA
and
KEVIN P. KEARNS
School of Urban and Public Affairs,
Carnegie-Mellon University, Pittsburgh, Pennsylvania, USA
PERGAMON PRESS
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FEDERAL REPUBLIC Pergamon Press GmbH, Hammerweg 6,
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Copyright © 1985 T. L. Saaty and K. P. Kearns
All Rights Reserved. No part of this publication may be reproduced,
stored in a retrieval system or transmitted in any form or by any means:
electronic, electrostatic, magnetic tape, mechanical, photocopying,
recording or otherwise, without permission in writing from the
publishers.
First edition 1985
Library of Congress Cataloging in Publication Data
Saaty, Thomas L.
Analytical planning.
(International series in modern applied mathematics
and computer science; v. 7)
Includes bibliographies.
1. System analysis. 2. Planning. I. Kearns,
Kevin P. II. Title. III. Series.
T57.6.S14 1985 658.4Ό12 85-3475
British Library Cataloguing in Publication Data
Saaty, Thomas L.
Analytical planning: the organization of
systems.—(International series in modern
applied mathematics and computer science, v. 7)
1. Management II. System analysis
I. Title II. Kearns, Kevin P. III. Series
658.4Ό32 HD38
ISBN 0-08-032599-8
Printed in Great Britain by A. Wheat on & Co. Ltd.
Preface
This book is about a new methodological approach to planning. The
Analytic Hierarchy Process has been applied to planning for at least 10 years
beginning with the Sudan Transport Study, followed by another application
to one of the largest beer industries in Mexico. Since that time, the process has
been used widely in several countries to set priorities, carry out cost-benefit
analysis and allocate resources. Recent applications have been made by
several organizations to the nuclear energy field. The Nuclear Regulatory
Commission has used the method as has the Canadian National Research
Council to allocate resources to research areas. More recently, the ΑΗΡ has
been used in systems design. In Israel, Professor Ami Arbel has worked with
the aircraft industry to design a new airplane. He found it helpful to deal with
trading off intangible factors and also tangible ones for which no formula is
available to relate them analytically.
A large number of applications to planning have been made by managers in
Pittsburgh industries ranging from banking to steel and to the development of
energy resources. We have applied it in the municipal area to induce
cooperation and coordinate services under a common purpose. This variety
has led us to write a book about it.
We decided to include in this book a discussion of complexity and systems
to make it clear that the methodology used in planning cannot be simplistic
without losing some major elements in a planning problem. Our conclusion is
that the structure of the problem can be as complex as one desires, to include
the relevant actors, objectives, criteria and alternatives, but the analysis must
be simple and uniform. The approach should not defy the capabilities of the
average person to understand what is going on and participate in the inputs
and in the interpretation of the outputs.
For space limitations, we have worked out some examples in detail and
given references to a large number of other applications.
Our complex society, with its myriad problems, can no longer be taken a
little at a time. It must be approached as a whole; related issues must be looked
at simultaneously rather than sequentially. Systems and planning are two
fundamental concepts that are intertwined: it is impossible to think of one
without the other. We plan within a system, for no system comes about by
chance. It must be designed with considerable forethought. Some systems
develop and evolve in response to needs. The food system is one example; a
biological system is another. It takes such systems long periods of time to find
the correct response. Often the response does not work well. Most systems, in
vi Preface
fact, disintegrate and vanish. If the needs are those of sick or hungry people,
compassion demands that we design responses quickly rather than wait for
things simply to happen. Our human spirit rebels when we stand by to see an
undesirable outcome beyond our control materialize. Selective inattention
and wishful thinking too often result in undesirable outcomes.
In complex environments, things do not automatically work themselves
out. We must plan in order to be better equipped to respond. Our world
society with 4.8 billion inhabitants, 6 billion in twenty more years, will not get
simpler. It cannot rely on statistics for solutions. We need to plan our future
with a clear and definite sense of purpose, and we must learn to do it
successfully.
The book is organized according to a conceptual framework which links the
concepts of systems and planning and suggests a methodological tool for
integrating the two.
Part I presents the basic ideas behind complexity, systems, hierarchies and
prioritization.
Part II of the book introduces planning as a unique form of decision making
with illustrations of some prominent philosophical and methodological
approaches. In particular, we discuss some shortcomings of traditional
approaches to planning and illustrate how the systems approach addresses
these shortcomings.
This book is intended as an introduction to the subject designed for both
researchers and practitioners. Those impatient with the philosophy of systems
but are interested in planning may read Chapter 3 along with Part II.
PART I
Systems and Complexity
This part includes four chapters on systems and complexity and on the Analytic
Hierarchy Process as a systems approach to systems problems. Chapter 1 deals with
complexity and interaction, Chapter 2 with systems, Chapter 3 with the methodology and
Chapter 4 with systems characteristics and how they are reflected in the methodology.
CHAPTER 1
Complexity
1. Introduction
A striking feature of our world environment is the increasing complexity
and interdependence of its parts. The myriad problems that occur in our daily
lives are interwoven in a fabric whose features cannot be described simply by
the colors of its constituent threads.
These problems, whether social, political, or economic, do not exist in
isolation. They cannot be factored out of the whole, each explained on its own
and the set of explanations thrown together to explain the whole. Indeed, we
might even question that problems fall into specialized "social," "political,"
or "economic" classes. All but the very trivial issues in any of these spheres of
activity are related to corresponding problems in the other spheres. Adding to
our dilemma is the continually changing nature of this interdependence.
Interdependence is affected by changes in population, resources, cartels,
technology and the like.
The environment in which problems occur is itself not a static entity. It is
dynamic as it is always changing by being drawn on, dumped in, explored and
manipulated. The environment changes as its problems and their solutions
change; it changes in physical and conceptual space as the relations among the
parts are altered by technological advances and filtered through highly
personal interpretive structures. It also changes in time, as events markedly
affect it.
Complexity is many things acting together. This concept lies at the heart of
general systems theory, the topic of our inquiry. Our finite, partly emotional,
partly logical minds, which are our windows for seeing the world, have
complexities of their own. These internal complexities must themselves be
understood because we believe that our construction of reality is relative to
our physical and behavioral make-up.
In this chapter we explore the nature of complexity itself and some of the
current problems facing society. Systems ideas have been applied in a diversity
of real life problems ranging from food distribution to medicine. Still the
practical value of systems thinking in such areas, has been questioned and
criticized. We intend to examine some of what has been said.
What we need are sensible ways to deal with our problems. The approach
given here facilitates the use of creativity and experience to structure complex
3
4 Analytical Planning
problems and pursue their solution within an accessible and systematic
framework.
2. Complexity
Complexity has been defined as a large number of things that interact in a
nonsimple way (Simon, 1965). Some would argue that quantity is not a
requirement for complexity. A single thing like a knot in a rope can, of itself,
be complex. However, we must distinguish between the complex and the
difficult. The knot has a single solution that may be difficult but whose
purpose is clear: to free the rope. A complex problem usually has many
possible solutions, and these solutions can serve many purposes. For example,
the design or modification of an integrated urban transportation system will
require consideration of air, land and, possibly, water facilities. The objective
would be to develop and maintain an appropriate mix of these that would
complement each other. There would be several, perhaps many, such mixes,
any one of which might effectively address the problem.
Complexity is interaction and, more importantly, interdependence—that is,
the behavior of one or several elements affects the behavior of other elements.
For example, the economy depends on energy and other resources, the
availability of energy depends on politics, politics depends on power, and
power depends on military strength and economic stability. Note that these
interdependencies are symmetrical: politics depends on the economy, but the
economy also depends on politics. What results is a complex network of
symmetric relations with varying intensity. It is through differentiation that the
degree of exclusiveness of the elements becomes apparent in the complex
framework in which they occur. By differentiation we mean that the social
and/or functional roles of the interacting elements are clearly different; they
unfold in a unique and discernible pattern. Complexity depends not only on
the interdependence but also on the number of interacting components. (See
also Weaver, 1948.) Therefore a defensible framework for dealing with
complexity depends on the new properties produced from the synergy of
interaction of interdependent parts. Such properties are not in the parts and
are frequently attributable to new elements or clusters that are a result of
interactions of existing elements.
Our interpretation and understanding of complexity depends on our
culture, language, previous experience, professional training and the logic we
use to piece together the parts of the puzzle. This subjectivity presents a
higher-order dilemma that dispels any latent suspicion that there is an
objective interpretation of reality that transcends our senses and cognition. It
seems that our best hope is to make do with what we have in the only way we
know how by setting our priorities and pursuing their fulfillment to the best of
our ability. Few of our answers are likely to remain unchanged forever.
The people (called actors) who decide what action to take to solve complex
Complexity 5
problems and those affected by the decision (called stakeholders) usually have
different interests and conflicting goals. There may be no consensus (within
these two groups or between them) on desired ends or on strategies designed to
achieve these ends. Thus, the selection of goals and also the selection of the
means to achieve them require debate and compromise. Participants may
approach the decision process with different assumptions about environ-
mental constraints and the internal constraints of the system itself. These
assumptions shape their perceptions, determine their definitions of the
problem, and condition their responses to it. Precisely because conflicting
goals result from alternative judgments and judgments are value-laden, we
must attempt to bring to the surface, draw out, and examine values and special
interests in complex decision problems.
Another difficulty one encounters in understanding complexity is what we
discussed earlier, that is, the linkage of its many problems in what is called the
problématique. The solution of the set as a whole cannot be derived by dividing
it into small problems, solving these, and synthesizing an overall solution to
the larger problem. Complex problems never exist in isolation and seldom are
characterized by one-way causal relations. Rather, complexity links problems
together and forms a pattern of mutual interaction and multiple causality. The
precise nature of the pattern may not be clearly understood. Too often we
discover that problems are linked only after we have implemented "sol-
utions," which to our dismay, generate second-order problems.
3. Examples of Complex Problems
A host of interdependent domestic and international problems graphically
illustrate that our world is much more than a mere collection of isolated and
autonomous elements. Here are a few brief examples.
Consider the availability of venture capital which is an important factor in a
robust economy. Also consider the availability of new sources of energy. The
availability of money to explore and develop alternative energy sources
depends on economic policies such as tax breaks for certain investments,
lower interest rates on loans, and sufficient rewards for success. Such measures
could encourage excess money to float in the direction of new energy
development. The ultimate outcome would be intensified competition in the
energy market and lower oil prices. In turn, lower oil prices would help slow
down the rate of inflation, thus contributing to robustness of the economy.
Patterns of food production and distribution are also linked to issues of
international economic development. Third World nations often are frust-
rated in their attempts to industrialize their economies. The reason is, in part,
that they must export many of their most precious raw materials and natural
resources in order to obtain favorable trade relations with the industrialized
nations for their food producing potential.
Shifting the emphasis of food production from the cultivation of currently
6 Analytical Planning
arable regions to the cultivation of unused land, as some have suggested, only
worsens the interrelated energy problems. Rendering new land productive
requires a greater investment of energy per acre.
In addition, preparing new land for cultivation frequently entails defores-
tation which can upset the ecological balance. Also expanding the productive
capacity of currently used land can result in severe soil erosion. In the long
run, once rich farmland may be transformed into a barren desert. It appears
that both supply and demand for food has effects on the ecology and on
expenditure for energy.
Another example is the nuclear arms race. Issues of disarmament involve
more than the obvious concerns of national security and real or imagined risk.
Military spending has a significant impact on the infrastructure of industries
and activities that supply transportation, communication, and central
power—the base of any modern economic system. A dramatic shift in the
pattern of military spending is likely to have immediate and far-reaching
effects on any economic system of which it has become an integral component.
Reduced military spending would not only put many people out of work; it
would also constrain research activities that often lead to products with peace-
time as well as war-time uses. This problem which is affected by tangible and
intangible forces is considered a high priority problem as it affects the survival
of mankind.
The economy presents yet another example of complexity. Our frequent
failure to accurately predict fluctuations in the economy suggests that the
complexity inherent in socio-economic behavior may exceed the limits of our
intellectual capabilities. Even with the use of sophisticated economic theories
and models, we find that we are unable to cope with the complex network of
interrelations. We have difficulty predicting the short-term, year-to-year or
even month-to-month, state of the economy. Long term predictions of several
years or more amount to little more than educated guesswork. Symptoms
occur in one sector of the economy as a result of events in another sector. For
example, productivity is related to capital investment, which in turn is related
to interest rates, credit availability, and tax incentives. The state of the
economy is also related to labor mobility patterns, which in turn are related to
a host of local and regional issues such as employment opportunities, cost of
living, and general quality of life. Finally, the state of the economy is, to a large
extent, determined by intangibles such as confidence in the policies of elected
leaders. If there is widespread trust and confidence in the economic policies
formulated by government leaders, then economic growth becomes, in effect,
a self-fulfilling prophecy. The reverse is also true. This economic vitality may
be as much a state of mind as a state of being.
The circular patterns of the economy and its subjective, intangible elements
make it difficult to identify points of intervention that offer the potential for
producing desired effects. We have come to realize that actions taken now are
not likely to produce immediate results; and the results ultimately produced
