DEA-Based PROMETHEE II Distribution-Center Productivity Model: Evaluation and Location Strategies Formulation

Hisham Alidrisi

doi:10.3390/app11209567

Abstract

The current era of industrial economics necessitates warehouse and logistic distribution centers (DCs) to contribute productively toward an organization’s success. Playing such a critical productive role implies that logistics activities must be practiced effectively and efficiently. However, the indistinguishability between effectiveness and efficiency leads to a somewhat shallow interpretation, and consequently, a diluted evaluation. Hence, this paper aims to develop a productivity evaluation model for nine DCs belonging to an international automotive vehicles and spare parts company. The developed model was set up based on two multi-criteria decision making (MCDM) approaches: the Preference Ranking Organization Method for Enrichment of Evaluations II (PROMETHEE II) and data envelopment analysis (DEA). PROMETHEE II was employed to evaluate the effectiveness, while the DEA was utilized in order to measure the efficiency of the investigated DCs. The resulting hybrid model collectively creates what can conceptually and practically be considered a productivity evaluation model. The results also provide six different strategies through which distribution center locations can be evaluated in order to implement potential future initiatives.

Highlights

In the current industry 4.0 era, almost all fields of industry are characterized by sophisticated manufacturing approaches associated with various services that are fully dependent on rapid technological changes
Each of them is capable of attaining a certain target for each output measure, considering the output measures in a manner that reflects the proportional differences among all distribution centers (DCs) input and output measures collectively
The supply chain management (SCM) literature is abundant with research that is oriented toward performance evaluation, efficiency and/or effectiveness measurement, and productivity management utilizing different approaches

Summary

Introduction

In the current industry 4.0 era, almost all fields of industry are characterized by sophisticated manufacturing approaches associated with various services that are fully dependent on rapid technological changes Such a situation necessitates that warehouse and logistic distribution centers (DCs) accomplish their critical roles for the productive success of any organization. Within the context of the relevant MCDM-based research applications [2,3,4,5,6,7,8,9,10], neither the original version of DCs, i.e., warehouses [11], nor the extended version of DCs (or what is currently known as logistic centers) [12] have provided robust evidence for handling the issue of the indistinguishability between effectiveness and efficiency (i.e., the two wings of productivity). An advanced barcoding scan technology is being utilized in order to control around

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Conclusion