Abstract
When threatened with catastrophic political or economic fluctuations, a firm might be forced to consider relocating their supply chain to reduce the risk. Such a relocation necessitates a series of changes, so making the right decision is crucial for sustainable development of the company. In the past, various models have been developed to help managers to select the optimal location. However, most of these considered the factors independently but in the real world, these factors have a mutually influential relationship. This study purposes a hybrid multiple criteria decision making (MCDM) model to provide decision makers with a comprehensive framework to evaluate the best strategies to solve relocation problems, which also considers the interdependency between criteria. The model incorporates the DANP (Decision Making Trial and Evaluation Laboratory-based Analytic Network Process) model (subjective weight) and entropy method (objective weight) to determine the weights of the criteria. Then, the modified VIKOR (VIšekriterijumsko Kompromisno Rangiranje) method is applied to select the optimal alternative for relocation. The usefulness of the model is demonstrated by taking an electronics manufacturing company with a global supply chain as an example. The results indicate that the proposed hybrid model can assist companies in choosing the best locations for their supply chains for sustained development.
Highlights
With the development of globalization, the establishment of a stable supply chain has become one of the important strategies for the sustained development of an enterprise
The DANP-mV model is derived from the integration of Decision Making Trial and Evaluation Laboratory (DEMATEL), DANP and modified VIKOR, three models
The DANP-mV model has some advantages, it still relies on the subjective opinions of experts
Summary
With the development of globalization, the establishment of a stable supply chain has become one of the important strategies for the sustained development of an enterprise. Sometimes, due to the catastrophic economic or political fluctuations, some county or region will lose its original advantages, forcing companies to transfer their supply chain to other countries to reduce the possible risk. How to transfer the original supply chain and select the best alternatives are critical decisions for managers. The relocation of production lines plays a key in sustainable supply chain management in today’s competitive markets. The proposed model considers the evaluation framework as an integrated system and transforms the causality of a complex evaluation system into a visualization analysis In integrates both subjective and objective weights obtained by the DANP and entropy method, which remedies the reliance in prior models on the experts’ subjective opinions.
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