A Fuzzy Multi-Criteria Decision Analysis Approach for Retail Location Selection

Abstract

This paper proposes fuzzy multi-criteria decision-making approach integrated with fuzzy real option value theory. The applicability of the proposed method was shown on a real-world supermarket location selection problem. Based on the interviews with the experts, the evaluation criteria for retail location selection were identi¯ed. Then the network for fuzzy analytic network process (ANP) method was constructed. The fuzzy real option value for each alternative was calculated and used in the proposed approach as the representative of thē nancial dimension. Finally, the preference ranking of alternatives and the relative importance of the criteria were obtained. The signi¯cant contribution of the proposed approach is that it integrates the¯nancial dimension (FROV) of the location problem methodologically with the multi-criteria characteristic (FANP) of the problem. Another importance of this study is thē rst usage of real options valuation in the area of location selection science.

A Comparative Analysis of Fuzzy TOPSIS and Geographic Information Systems (GIS) for the Location Selection of Shopping Malls: A Case Study from Turkey

“…At this step, the evaluation criteria are determined. As the determination of the criteria that will be used for evaluation of alternative locations has a direct impact on the accuracy and quality of the results, this step is crucial [89,90]. Depending on the type of the business and the problem on hand, facility location selection literature presents different approaches and techniques for identifying evaluation criteria.…”

“…Depending on the type of the business and the problem on hand, facility location selection literature presents different approaches and techniques for identifying evaluation criteria. For instance, retail location problems may require considering a different set of criteria when compared to factory location problems [90]. In this sense, Zentes et al [91] suggest that the analysis of the catchment area of a retailer represents a vital element in each phase of the retail location decision process.…”

“…According to the authors, the catchment area represents the geographic zone that contains the customers of a specific site or region for a retailer and it determines the potential demand at a specific site and directly effects the sales and profitability of a retailer. In this framework, considering the studies carried out by Roig-Tierno et al [22], Lin and Juan [6], Cagri et al [90], Yavuz and Deveci [59], Cheng et al [57], Önüt et al [30], Zolfani et al [58] and Kuo et al [92] and the results of the interviews conducted with experts including urban planners, academicians and managers, six main criteria were determined for the shopping mall location selection in this study. These six criteria are regional development (C1), economy (C2), transportation (C3), population density (C4), tourism (C5) and socio-demographic characteristics (C6).…”

“…The regional development criterion includes the availability of human resources and natural resources, infrastructure, level of urbanization and potential of continuous development [6,22,43,[57][58][59]90]. The economy criterion basically represents the total cost of initial investment and return on investment [30,57,92].…”

“…The economy criterion basically represents the total cost of initial investment and return on investment [30,57,92]. Transportation/accessibility refers to the availability of public transportation and proximity to the railways and major highways [30,57,58,90]. As pointed out by Dolega et al [93], accessibility has a direct impact on the extent of retail catchment area.…”