Application of AHP method for project selection in the context of sustainable development

Any activity of an industrial enterprise will have an impact on the economic, social and environmental sectors. At present, the main business goal is to generate and maximize profits. The 2030 Agenda for Sustainable Development put the focus on maximizing profit also how profit is generated and what impact have profit-generating activity on society and the environment. Every activity in an industrial enterprise is preceded by decision-making. The multi-criteria nature of decision-making in the context of sustainable development (and its economic, social and environmental criteria) is a prerequisite for the application of multi-criteria optimization methods. The basic precondition to apply exact methods in decision-making is the manager who has knowledge of the exact methods and interest in their application. Based on different theories and decision-making approaches that do not arise from an exact decision-making approach, the decision-makers are unable to make rational decisions. The results of several conducted surveys of managers' decision-making show that managers decide on complex issues based on subjective reasoning or intuition (Liebowitz, in: Forum: intuition-based decision-making: the other side of analytics. https://analytics-magazine.org/forum-intuition-based-decision-making-the-other-side-of-analytics, 2015). The authors of the article focused on the issue of decision-making in the selection of a production project based on the criteria of sustainable development. The aim of the paper is to present the application of exact method-Analytical Hierarchical Process in decision process on above mentioned issue.

Automated summary

Any activity of an industrial enterprise will have impacts on the economy, society, and environment. The focus of the current business goal is to generate and maximize profits. However, the 2030 Agenda for Sustainable Development emphasizes the need to consider how profits are generated and their impact on society and the environment. Decision-making in industrial enterprises is a multi-criteria process, and exact methods, such as the Analytical Hierarchical Process, can be applied to support sustainable decision-making. Studies have shown that managers often rely on subjective reasoning or intuition when making complex decisions. This article presents the application of the Analytical Hierarchical Process in the decision-making process for selecting production projects based on sustainable development criteria.