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Using Mathematics To Quantify Subjective Decisions: Application Of Analytic Hierarchy Process To Risk Assessment

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dc.contributor.authorRabihah Md. Sumen_US
dc.date.accessioned2024-05-28T04:43:26Z
dc.date.available2024-05-28T04:43:26Z
dc.date.issued2018
dc.description.abstractRisk management requires human judgements, from risk identification, assessment to response. Although automated tools are useful in handling large amounts of data and in performing complex calculations rapidly, humans undertake the entire risk management process. They bring to the process their intuitions, insights, previous experiences and skills. Therefore, creating a rich source of information of risks faced by an organisation. Ignoring human factors may impoverish information and limit risk management to only measurable factors. This study contributes to the field of decision-making and risk assessment by investigating and discussing in detail how to quantify subjective judgements using the Analytic Hierarchy Process (AHP). AHP is used to assess risk of an insurance company. It discusses how to do risk assessment by combining both intuition and analytic in the decision-making process. The study defines intuition as knowledge and experience, and analytic as the mathematics or quantitative analysis to derive the result. It demonstrates how Analytic Hierarchy Process (AHP) - a flexible multi-attribute or multi-criteria decision making tool, enables risk managers to use both intuition and analytic to do risk assessment. Risk assessment using AHP produces global priority weights representing the overall risk ranking of an insurance company. The study develops a risk assessment problem and uses AHP to organise and structure risks and sub-risks of the problem. It uses formative evaluation method with open-ended questionnaires to obtain feedbacks from risk managers on AHP. Three employees of a risk management department in a government agency assesses the risks using AHP. AHP strengths are easy to use and understand, improves risk assessment and useful for risk assessment problems that have scarce or no data. AHP limitation are the numbers and repetitiveness of the pairwise comparisons. The participants either ignore some of the pairwise questions or they answer randomly instead of deliberate judgements.en_US
dc.identifier.epage19
dc.identifier.issn2289-7984
dc.identifier.issue1
dc.identifier.other977-4
dc.identifier.spage7
dc.identifier.urihttps://www.akademiabaru.com/doc/ARDV44_N1_P7_19.pdf
dc.identifier.urihttps://oarep.usim.edu.my/handle/123456789/6099
dc.identifier.volume44
dc.language.isoen_USen_US
dc.publisherAkademia Baruen_US
dc.relation.ispartofJournal of Advanced Research Designen_US
dc.subjectnalytic hierarchy process, AHP, risk assessment, risk management, risk matrixen_US
dc.titleUsing Mathematics To Quantify Subjective Decisions: Application Of Analytic Hierarchy Process To Risk Assessmenten_US
dc.typeArticleen_US
dspace.entity.typePublication

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