An integrated modelling approach for an optimal location of warehouses in the defence industry organisation

Abstract

Countries’ defence industries are the leading indicator of their global power. The warehouse is the place where the materials are kept until the customer order arrives so that the companies are viable and can respond appropriately to internal/external customer demands. In this regard, warehouse location plays a vital role in the defence industry in terms of storage options with increased flexibility, a simplified supply chain with cost management and optimal positioning according to deployment locations. In this study, the decision on the location of warehouses for logistic support during the warranty period of military vehicles manufactured and supplied to the armed forces by a defence company was made. It is aimed to propose the best solution to a real-life problem with high complexity, containing many data and constraints. In this context, the criteria that are thought to be most relevant to this problem have been determined by taking expert opinions. Having determined the order of importance of the requirements by the analytical hierarchy process (AHP) with the Super Decisions V 2.10, their weights were included as a coefficient of the objective function in the goal programming (GP) model. As a result of solving the GP model using GAMS (general algebraic modelling system), it was decided to select the warehouses that provided the optimal results among the alternative warehouse locations in 9 different locations. Furthermore, to see the impact of changes in criterion weights, sensitivity analysis has also been included. The significance of this research lies within the integrated usage of AHP and GP in the defence industry when determining warehouse locations by the experts’ opinions. With this study, not only a solution strategy was developed, but also a basis for the warehouse location decision in the defence industry projects already signed or to be signed was given.