UTASTAR method and its application in multi-criteria warehouse location selection

Abstract

To effectively manage large industrial companies, decision-making regarding the location of distribution warehouses are particularly important. Locating distribution warehouses is a multi-criteria problem in which the decision-making process is influenced by several quantitative and qualitative criteria. Among the methods proposed to aid location selection, the UTASTAR method is shown to be suitable for clarifying the decision-making process. This method determines single utility functions for each alternative location considered. This aids in the evaluation and comparison of alternative location options based on the preferences of the decision makers expressed in terms of multiple criteria. UTASTAR results enable managers and decision makers to rank the identified options and thereby justify the most suitable option to select as the preferred warehouse location. This research shows the effective application of the UTASTAR method in a case study relating to the selection by the Damghan Steel Company (Iran), from several alternatives, of the best location to construct its central warehouse. The approach proposed offers a new perspective to the problem of warehouse location selection by calculating single utility functions that meaningfully represent the relative values of alternative warehouse locations from a decision makers perspective.