Location Planning and Network Design
The planning of a new location belongs to the most complex and difficult planning problems in decision making. Moreover, it belongs to the strategic field of planning which deals with the most important and far-reaching decisions. While the problems consi
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Location Planning and Network Design
Abstract The planning of a new location belongs to the most complex and difficult planning problems in decision making. Moreover, it belongs to the strategic field of planning which deals with the most important and far-reaching decisions. While the problems considered in the previous chapters are mostly studied on an operative planning level, decisions about single locations or the structure of a supply chain are usually of long-term nature and may be crucial for the future survival and success of a company.
6.1
Location Planning as Multicriteria Decision Problems
When a new facility, e.g. a new warehouse or a new production plant, is to be established, there are usually many (often infinitely many) locations virtually possible. These locations differ in many aspects such as distances to suppliers, customers or other locations, land prices, availability and quality of labor, local regulations and taxes, infrastructure and so on. All these aspects influence the future profitability of the new site and often it is hard to quantify their influence and to estimate the future development of these influencing factors. Moreover, considering the large number of possible locations it is difficult to obtain all relevant data even for the current situation. In some cases today, geographic information systems (GIS) are applied to substantiate the location decision with the required data (see, e.g., Cheng et al. (2007)). Nevertheless, the provision of sufficiently complete data and the deduction of relevant criteria for a decision remains a major problem in location decisions. Besides the problem of obtaining the relevant data the multicriteria nature of a decision problem leads to the situation, that there is usually not only one best solution which outperforms other solutions in all criteria. Instead, there is typically a more or less extensive set of solutions denoted as Pareto-optimal or nondominated. For those solutions there does not exist another solution which is better in at least one criterion and not worse in all others. Various methods have been suggested during the last decades which employ additional information from a © Springer International Publishing Switzerland 2017 T. Hanne, R. Dornberger, Computational Intelligence in Logistics and Supply Chain Management, International Series in Operations Research & Management Science 244, DOI 10.1007/978-3-319-40722-7_6
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decision maker to determine a most preferable compromise among those solutions (see, e.g., Hanne 2012). Such preference-based information for solving the decision problem may, for instance, include weights for the criteria, information about desirable outcomes such as reference points, or the assessment of a utility function. In the following we discuss a number of studies on location planning problems which take into account a multicriteria modelling and solution approach. For instance, Awasthi et al. (2011) consider the following 11 criteria in a model for plan
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