Application of the Analytic Hierarchy Process on Warehouse Location Selection Factors

Abstract

The aim of this research is to study the factors affecting warehouse location selection. The study is to analyse main factors, including five main criteria such as environment, transportation, customers and manufacturers, labor characteristics and regulation and twenty sub-criteria. By means of Analytical Hierarchy Process (AHP) technique, the proposed approach is employed to determine the important weights of criteria
and calculate priorities from pairwise comparisons for each pair of decision factors in warehouse location selection. Results revealed that regulation (32 %) is the most significant main factor, followed by transportation (27%), labor characteristics (17%), customers and manufacturers (14%) whereas the least significant factor is environment (8%) when selecting warehouse location. For each sub-criteria, the top five most preference order are comprised of industrial standards (31.80%), legal( 30.5%), quality and reliability of transportation (10.4%), policies (7.4%) and politics (6.9%) respectively