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Q 505. What is the difference in Bayesian and Frequentist approach for hypothesis testing? Also explain Bayesian way of thinking and the Frequentist's way of thinking with simple examples. Note for website visitors - Two questions are asked every week on this platform. One on Tuesday and the other on Friday. All questions so far can be seen here - https://www.benchmarksixsigma.com/forum/lean-six-sigma-business-excellence-questions/ Please visit the forum home page at https://www.benchmarksixsigma.com/forum/ to respond to the latest question open till the next Tuesday/ Friday evening 5 PM as per Indian Standard Time. Questions launched on Tuesdays are open till Friday and questions launched on Friday are open till Tuesday. When you respond to this question, your answer will not be visible till it is reviewed. Only non-plagiarised (plagiarism below 5-10%) responses will be approved. If you have doubts about plagiarism, please check your answer with a plagiarism checker tool like https://smallseotools.com/plagiarism-checker/ before submitting. The best answer is always shown at the top among responses and the author finds honorable mention in our Business Excellence dictionary at https://www.benchmarksixsigma.com/forum/business-excellence-dictionary-glossary/ along with the related term

Analytic Hierarchy Process (AHP) is an organized decision-making method that enables analysis around a problem, needed for making a choice between available alternatives by determining the criteria basis which selection or prioritization will be done. It is a process of quantifying criteria and alternatives and relating each element to the desired outcome. Pugh Matrix is most popular decision making six sigma tool that uses scores awarded to criteria and scoring them for each alternative. It is a qualitative technique which allows stakeholders to make a choice between alternatives basis scores. While both are used for the same purpose but preference and usage are largely driven by the stakeholder approach, problem in hand and proof of concept needed. Let’s look at some of the differences. AHP PUGH Matrix 1. Pair wised Matching – compare two criteria at a time and amongst alternatives 1. Each alternative is independently awarded a score and compared with DATUM and against the weightage decided for each criteria 2. Quantitative method used for evaluation 2. Qualitative method by awarding scores 3. Complex Statistical Method 3. Simple Method based of Ranking 4. Enables a direct comparison between alternatives and via defined criteria 4. Each Alternative is not compared with each other 5. Consistency Index (<10%) aids validation of the comparison outcome. Improving a decision is possible 5. No such validation and standard are possible 6. Based on Continuous Data – Ratio 6. Based on Discrete Data – Ordinal Data Type 7. Is not LEAN SIX SIGMA QUALITY Tool 7. Is integral part of the LEAN SIX SIGMA QUALITY Playbook 8. Very difficult and time-consuming process especially with more criteria 8. Preferred tool to handle several criteria’s 9. Based on stimulus – response, a mathematical numeric relationship is established 9. Based on Logical thinking, experience and willingness of stakeholders. 10. Individual and Group decisions can be combined. Everyone has a strong reason to believe in the outcome 10. Stays Subjective to a great extent, enables understanding of each alternative compared to existing one The complexity involved and the ability to run AHP, differentiates the choice to be made in comparison with Pugh. AHP is more time consuming and requires complex calculations to reach towards conclusion, ability to handle data and using the method is the key. Hence, AHP is less preferred compared to Pugh and mostly due to simplicity factor. Example scoring movies to judge the most preferred for annual reward compared to a preference of IT Software involving investments. In first case Experience and Knowledge of stakeholders in reference to the problem in hand, governs the success and accuracy of Pugh Matrix outcome. Hence Pugh Matrix can handle sensitive analysis better and where quantitative data is available in abundant. Where as the client would want to have more statistical proof concept for deciding which Software to install and WHY, AHP will be the preference.