An analytic model for locating facilities strategically

This paper presents a strategic solution to the facility location problem which incorporates both external and internal criteria in the decision-making process. The external components of the model are customers and their wants, competitors, and the characteristics of various locations. The internal components of the model are the critical processes in the manufacturing organization. The framework presented uses quality function deployment (QFD), analytic hierarchy process (AHP) and analytic network process (ANP). QFD matrices with interconnected rows and columns relate market segments, competitive priorities, critical processes, location attributes and various locations. AHP determines the intensity of the relationship between the row and column variables of each matrix. Finally, ANP determines the intensity of synergistic effects among column variables. The model fine-tunes and adds precision to an otherwise qualitative strategic decision process. The applicability of our proposed model is demonstrated with a case study that summarizes an intervention in which the model's framework and basic concepts were applied. (c) 2004 Elsevier Ltd. All rights reserved.