HIERARCHY ANALYSIS METHOD: A SYSTEMATIC APPROACH TO DECISION MAKING UNDER UNCERTAINTY

Abstract

This article provides a detailed examination of the application of the Analytic Hierarchy Process (AHP) for evaluating investment alternatives under dynamic market conditions. The AHP methodology enables the structuring of complex multi-criteria tasks by dividing them into hierarchical levels and then progressively synthesizing the results to reach an optimal decision. Special emphasis is placed on how AHP reduces subjectivity when assessing numerous investment-related factors, as the final conclusions are based on quantitative indicators and a consistency check of expert judgments. To illustrate the advantages of this approach, the article presents a comparative analysis of three companies: Apple Inc., PAO “Segezha Group,” and PAO “Aeroflot.” The evaluation criteria include stock price dynamics, dividend yield, market capitalization, volatility (oscillation coefficient), and the influence of industry specifics on growth prospects. Apple Inc. stands out primarily due to its high market capitalization and stable dividend payouts, whereas PAO “Segezha Group” and PAO “Aeroflot” each have their own strengths, such as growth potential in specific market segments and a focus on promising industries. Nevertheless, the final results of the multi-criteria analysis indicate that Apple Inc. leads in most of the key metrics overall. It should be noted that the significance of AHP extends well beyond academic research. In practice, this method is widely used in the corporate sector for risk assessment, investment portfolio formation, and the selection of strategic priorities. Its flexibility ensures universal applicability both for large multinational corporations and for local enterprises that aim to objectively compare alternatives. The article also high lights the importance of careful data collection and systematization. Errors or inaccuracies at this stage can significantly distort the final conclusions, which is particularly critical in making investment decisions. The consistency check within AHP makes it possible to promptly identify conflicting evaluations and adjust the pairwise comparison matrices. Thus, the authors demonstrate that the Analytic Hierarchy Process is a reliable tool for the objective and transparent evaluation of investment projects. By considering a wide range of quantitative and qualitative characteristics, AHP enables the development of balanced recommendations regarding which assets and companies can deliver the highest returns at a reasonable level of risk.