Effect of product recovery and sustainability enhancing indicators on the location selection of manufacturing facility

Abstract

The inclusion of economical, environmental, and societal issues in all stages of doing business helps to bring about sustainable development. A business begins or expands by establishing new facilities, so selecting a facility location is a strategic and crucial decision. In the context of sustainability, the selection of location for different facilities can be a critical problem, especially for manufacturing firms that endorse the wide footprint of Extended Producer Responsibility policies. This study aims at prioritizing alternative potential locations for manufacturing firms with respect to the three dimensions of sustainability identified above. The three dimensions are assessed by factors obtained through a factor analysis and are grouped by corresponding invariable sub criteria. These sub criteria are chosen from the extant literature review. Then, the preferred order of alternative potential location is obtained by Technique for Order Preference by Similarity to Ideal Solution (TOPSIS) based on each location's overall performance. The performance of each alternative potential location is assessed on the basis of overall weights of alternatives, evaluating factors, and triple bottom line attributes, which were obtained by Analytical Hierarchical Process (AHP). The multi criteria decision making technique, AHP, calculates the weights of the qualitative and quantitative criteria impacting the location selection problem. Then the approach of the study is validated by applying a case from real life; the results are justified by completing a sensitivity analysis on the relative importance weights of the three primary attributes (economical, environmental, and social). The results of the sensitivity analysis demonstrate an effective decision making technique for the optimal selection of sustainable manufacturing locations.