Solving facility location problem for a plastic goods manufacturing company in Turkey using AHP and TOPSIS methods

Abstract

Facility location selection is one of the biggest and most enduring problems that managers face both when companies are being initially set up and undergoing an expansion for various reasons. Since there are many criteria to evaluate for a location the decision making process gets more complicated with every new criterion. Location selection, among all decisions, is one of the most delicate because of its costly and long term effecting nature. Once selected, it is harder than any strategic decision to return from. There have been many debates and try outs to figure out the best practice to choose the right decision making process and tool with along. Our research aims to contribute to the literature with a real life example of facility location selection. The problem and solutions stated herein are actually used and will be concluded with a concrete application, and therefore will help both practitioners and researchers to observe a factual example. One of the biggest plastics goods producers in Turkey has to decide a location among several options, and asked us (the researchers) to evaluate and find the best alternative for their new plant. There were four different possible locations to evaluate and limited time to come up with a logical option. Given that, criteria for possible evaluation were extracted from the literature and discussed with certain professionals. After the criteria determination, all criteria were enlisted in order to be ranked and compared using AHP method. Throughout the research paper all the steps are explained and shown. The most convenient option was weighted using TOPSIS and presented to the top managers of the company. Consequently the selection is made and the plant has started to be built.