Location Selection of a Manufacturing Facility from the Perspective of Supply Chain Sustainability

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.

Analysis of Determining Factory Location of Consumer Goods Company

“…Based on the description above, it is understood that there are not all reasons for determining the location The effort is used, it is considering that every business activity is different, there is also a need for a location close to raw materials, there is something to look for locations with low wages, locations that are close to market. This study supports previous research (Aversea et al, 2020;Dunning, 2014;Georgiev et al, 2014;Ghita, 2014;Lado-Sestayo et al, 2016;Lumbwe, 2020;Ellram et al, 2013;Huang et al ., 2020 andKimmelberg &Nicoll, 2012) which states that the proximity factor to manufacturing raw materials, low labor wages, availability of road infrastructure, electricity, and ease of permitting factory establishment.…”

“…There are several previous studies discussing the factors that influence determining business location (Aversea et al, 2020;Dunning, 2014;Georgiev et al, 2014;Ghita, 2014;Lado-Sestayo et al, 2016;Lumbwe, 2020) . Several studies also focus on examining the factors that influence location determination in manufacturing companies (Ellram et al, 2013;Huang et al, 2020 andKimmelberg &Nicoll, 2012), which aim to succeed in market expansion and increase profitability. Several factors determine a business location, namely proximity to manufacturing raw materials, cheap labor costs, availability of road infrastructure, electricity, and ease of obtaining factory permits.…”

Symmetric and Asymmetric Data in Solution Models

“…Much attention was given to civil engineering in terms of construction project management [56,58] and the analysis of building structures [59,61]. Three papers analysed the optimisation of supply chains [62,64,66]. Two papers aimed to optimise e-activities, namely, to rank e-commerce development strategies [65] and to evaluate e-learning courses [67].…”

Using a Modified VIKOR Technique for Evaluating and Improving the National Healthcare System Quality

“…In the past, many studies have combined VIKOR with AHP, ANP, DANP or other methods, and used these methods to obtain weights. However, these methods rely on experts' judgements to make decisions, and the results of decision-making are easily affected by the experience and preferences of experts [55].…”