Multi-criteria warehouse location selection using Choquet integral

Abstract

The location of a warehouse is generally one of the most important and strategic decision in the optimization of logistic systems. Warehouse location is a long-term decision and is influenced by many quantitative and qualitative factors. Among the main criteria taken into account in this paper, some are costs, labor characteristics, infrastructure, and markets. This paper also includes some sub-criteria because of the hierarchical structure of the problem, like tax incentives and tax structures, availability of labor force, quality and reliability of modes of transportation, and proximity to customers. The conventional approaches to warehouse location selection problem tend to be less effective in dealing with the imprecise or vague nature of the linguistic assessment. Under many situations, the values of the qualitative criteria are often imprecisely defined for the decision-makers. Choquet integral is a suitable multi-criteria method to capture this imprecise or vague nature. This paper shows a successful application of multi-criteria Choquet integral to a real warehouse location selection problem of a big Turkish logistic firm.