Assessment of model validity of analytic network process using structural equations modelling: an application of supplier evaluation problem

To model decision problems properly has a direct effect on the quality of the solution. The aim of this study is to minimise the errors arising from the decision maker during modelling for increasing problem-solving efficiency of analytic network process (ANP) method. In order to achieve this aim, a two-stage approach was proposed in this study: 1) the decision problem was modelled by ANP based on experts' opinions; 2) the model is assessed by structural equation modelling (SEM) for evaluate its validity and to purify it from expert sourced errors. To prove that, a supplier evaluation problem examined and modelled with ANP. Then the ANP model is discussed as a structural model and verified statistically by SEM. After evaluation, better representation of the decision problem has been provided. This study is the first to statistically evaluate the ability of modelling of ANP approach that is widely used in literature. [Submitted 03 January 2011; Revised 26 May 2011; Accepted 21 June 2011].