An innovative orders-of-magnitude AHP approach of leading industries selection: Case study of Jiangbei Industrial Clusters in China

Abstract

In current stage of China Industrial Transfer, how to select the leading industries is an extremely difficult decision. In this research, we study the selection problem of Jiangbei Industrial Clusters in Anhui Province. Total thirty-three industries can be transferred to Jiangbei Industrial Clusters, however due to limited capacity, Jiangbei Industrial Clusters can only accommodate a few of them. The difficulties of such decision include: 1) the decisions are qualitative within a complex and uncertain environment; 2) the number of alternatives is beyond the upper bound of comparing elements in general decision making methods. We introduce a new methodology-the Orders-of-Magnitude approach of the Analytic Hierarchy Process (OM-AHP) to solve such selection decision. The OM-AHP follows AHP philosophy to structure qualitative questions and uses “pivot” element to handle the situation when the alternatives become more than seven. By employing OM-AHP methodology, we found the modern logistics industry and ship & marine equipment etc., are identified to be the leading industries; particularly, we recommend to give higher priority in modern logistics industry and the advanced equipment manufacturing industry, given these two industries could dramatically improve the overall comprehensive economic strength and significantly enhance competitive advantages of the Jiangbei Industrial Clusters.

Keywords

Decision analysis / AHP / industrial transfer

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