Warehouse location selection with TOPSIS group decision-making under different expert priority allocations

Abstract

Warehouses are crucial infrastructures in supply chains. As a strategic task that would potentially impact various long-term agenda, warehouse location selection becomes an important decision-making process. Due to quantitative and qualitative multiple criteria in selecting alternative warehouse locations, the task becomes a multiple criteria decision-making problem. Current literature offers several approaches to addressing the domain problem. However, the number of factors or criteria considered in the previous works is limited and does not reflect real-life decision-making. In addition, such a problem requires a group decision, with decision-makers having different motivations and value systems. Analysing the varying importance of experts comprising the group would provide insights into how these variations influence the final decision regarding the location. Thus, in this work, we adopted the Technique for Order of Preference by Similarity to Ideal Solution (TOPSIS) to address a warehouse location decision problem under a significant number of decision criteria in a group decision-making environment. To elucidate the proposed approach, a case study in a product distribution firm was carried out. Findings show that decision-makers in this industry emphasise criteria that maintain the distribution networks more efficiently at minimum cost. Results also reveal that varying priorities of the decision-makers have little impact on the group decision, which implies that their degree of knowledge and expertise is comparable to a certain extent. With the efficiency and tractability of the required computations, the TOPSIS method, as demonstrated in this work, provides a useful, practical tool for decision-makers with limited technical computational expertise in addressing the warehouse location problem.

Keywords

• warehouse
• location decision
• multiple criteria decision-making
• topsis