Multi-criteria decision analysis for efficient location-allocation problem combining DEA and goal programming

¹ Department of Management Science and Engineering, Business School, Nankai University, Tianjin 300071, P.R. China.
fanglei@nankai.edu.cn
² Department of Mathematics, Qinghai Normal University, Qinghai 810008, P.R. China.
hclwxy@yahoo.com.cn

Received: 25 January 2014
Accepted: 19 January 2015

Abstract

Facility location-allocation (FLA) decisions play a significant role in the performance of supply network in many practical applications, such as emergency service system, supply chain system, public service system, etc. In this paper, a multi-criteria model (including multi-attribute and multi-objective) for optimal and efficient facility location-allocation patterns was proposed. We first utilize multi attribute decision making (MADM) method–DEA to evaluate the relative efficiency of each potential location, and then combine the efficiency identified from DEA as a goal in a multi objective decision making (MODM) framework by using goal programming. A hypothetical example is presented to illustrate the effectiveness and the efficiency of the proposed model. Results demonstrate that the proposed multi-criteria model is an effective tool for generating a set of more realistic and flexible optimal solution in solving facility location- allocation problems by adjusting the goal priorities with respect to the importance of each objective and the aspiration level with respect to desired target values. The proposed model is also flexible and general enough to consider other specific location decisions such as emergency facilities, undesirable facilities and supply chain design by combing specific location modeling goal with the DEA model.