Decision-making approach for the distribution centre location problem in a supply chain network using the fuzzy-based hierarchical concept

Abstract

In the era of global business and competitiveness, supply chain management has emerged as the critical factor for the success of companies. The past few decades have witnessed the importance of the linking channels among suppliers, manufacturers, and customers. The distribution centre (DC) location problem is a very fundamental and basic decision-making problem in terms of an efficient and effective supply chain. The decision concerning DC location, bearing in mind the current and future business perspective, is a cumbersome task and involves a large amount of investment. The selection of a site is a multicriterion decision-making problem and requires a thorough analysis of both qualitative and quantitative factors. The comparative study of different potential sites on a common set of criteria can help to handle the problem systematically and effectively. In general, most of the decision-making approaches such as the analytical hierarchy process (AHP) seem inefficient in handling the imprecise and vague linguistic comparisons of the different criteria. In this paper, a fuzzy integrated hierarchical decision-making approach is developed to solve the DC location selection problem. A case study adopted from previous literature is also discussed in this paper to show the effectiveness and robustness of the proposed methodology over the existing conventional hierarchical approaches.