Project appraisal and selection using the analytic network process

Abstract

Where prioritization and selection process of large-scale construction projects is concerned, governments should consider various quantitative and qualitative criteria when choosing the best project alternative. The traditional benefit–cost (BC) analysis has some drawbacks in terms of analyzing qualitative attributes that cannot be easily expressed in monetary terms. To eliminate this limitation, multicriteria decision-making techniques are proposed for the solution of project prioritization problems. In this paper, an analytic network process (ANP) model is developed to demonstrate how the project selection process can be carried out by considering both quantitative and qualitative factors, as well as their interrelations. The decision network is grouped under four subnetworks, namely benefits, costs, opportunities, and risks. The selected alternatives are real highway projects that are in the investment agenda of the Turkish government. Using the proposed network model, four investment alternatives are assessed by a team of experts and achieved results demonstrate that the ranking of project alternatives may significantly change when the ANP model is used instead of the classical B/C approach. Key words: analytic network process (ANP), multi-criteria decision making, project selection, benefit–cost analysis.