SELECTION OF DISTRIBUTION CENTER LOCATION USING FUZZY TOPSIS APPROACH

Bibhuti Bhusan Tripathy, Sarbjit Singh

Abstract


Selection of distribution center location is one of the crucial activities for a company to reduce transportation costs and improve business performance. To select an appropriate location for the distribution center, decision-makers must consider many factors such as availability of labor, infrastructure, closeness to customers and suppliers, expansion capacity, etc. It is very difficult for the decision-makers to select an appropriate distribution center that satisfies all requirements of various criteria. In this paper, the fuzzy technique for order preference by similarity to the ideal solution (TOPSIS) approach is presented to evaluate and select an appropriate distribution center location from many alternative locations. The proposed approach involves identification of potential alternative locations, selection of evaluation criteria, use of fuzzy set theory and linguistic variables to evaluate the rating of alternatives to the criteria, and the fuzzy TOPSIS approach to generate aggregate scores for evaluation and selection of the best distribution location center from all alternatives. The best alternative for a distribution center location is the best alternative with the highest score. An illustrative example is presented to clarify the results and the applicability of the proposed approach. The result can suggest that managers in the company deal with multiple criteria and uncertainty in selecting distribution centers through linguistic parameters. The proposed approach can be practically applied in deciding upon the potential location of the distribution center when the data are vague, imprecise, and uncertain by nature.

Keywords: Distribution center, Multi-criteria decision-making, Fuzzy theory, Fuzzy TOPSIS.


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References


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