UTASTAR method and its application in multi-criteria warehouse location selection
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UTASTAR method and its application in multi-criteria warehouse location selection Mohammad Ehsanifar 1 & David A. Wood 2
&
Arezoo Babaie 1
Received: 14 November 2018 / Revised: 2 October 2019 / Accepted: 10 November 2020 # Springer Science+Business Media, LLC, part of Springer Nature 2020
Abstract To effectively manage large industrial companies, decision-making regarding the location of distribution warehouses are particularly important. Locating distribution warehouses is a multi-criteria problem in which the decision-making process is influenced by several quantitative and qualitative criteria. Among the methods proposed to aid location selection, the UTASTAR method is shown to be suitable for clarifying the decision-making process. This method determines single utility functions for each alternative location considered. This aids in the evaluation and comparison of alternative location options based on the preferences of the decision makers expressed in terms of multiple criteria. UTASTAR results enable managers and decision makers to rank the identified options and thereby justify the most suitable option to select as the preferred warehouse location. This research shows the effective application of the UTASTAR method in a case study relating to the selection by the Damghan Steel Company (Iran), from several alternatives, of the best location to construct its central warehouse. The approach proposed offers a new perspective to the problem of warehouse location selection by calculating single utility functions that meaningfully represent the relative values of alternative warehouse locations from a decision makers perspective. Keywords Selecting optimum warehouse locations . Multi-criteria decision-making (MCDM) . UTASTAR . Utility functions . Ranking preferences
1 Introduction Deciding on distribution warehouse locations is considered as one of the most important decisions, impacting logistics and operating efficiency, for managers of large industrial companies. Finding the best location for warehouses can achieve competitive and strategic benefits for a company (Owen and Daskin 1998). Also, distribution warehouse location is often the key to improving efficiency and profitability of a company. Such improved performance can be used as a leverage to reach various goals of delivering desirable services to * David A. Wood [email protected] Mohammad Ehsanifar [email protected] Arezoo Babaie [email protected] 1
Department of Industrial Engineering, Arak Branch, Islamic Azad University, Arak, Iran
2
DWA Energy Limited, Lincoln, UK
customers while reducing distribution costs (Karmaker and Saha 2015). Such benefits have driven research in recent years to focus upon how to best consider goals and criteria that help to promote this potential improvement in performance, by making the warehouse selection process more systematic with aid of clear decision-making tools. Warehouses are essential components of distribution chains being critical to the commercial success and competitiveness of industr
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