A FUZZY MULTI-CRITERIA DECISION ANALYSIS APPROACH FOR RETAIL LOCATION SELECTION

A. Cagri Tolga (), Fatih Tuysuz () and Cengiz Kahraman ()
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A. Cagri Tolga: Department of Industrial Engineering, Galatasaray University, 34357, Ortakoy, Istanbul, Turkey
Fatih Tuysuz: Department of Industrial Engineering, Istanbul University, 34320, Avcilar, Istanbul, Turkey
Cengiz Kahraman: Department of Industrial Engineering, Istanbul Technical University, 34367, Macka, Istanbul, Turkey

International Journal of Information Technology & Decision Making (IJITDM), 2013, vol. 12, issue 04, 729-755

Abstract: This paper proposes fuzzy multi-criteria decision-making approach integrated with fuzzy real option value theory. The applicability of the proposed method was shown on a real-world supermarket location selection problem. Based on the interviews with the experts, the evaluation criteria for retail location selection were identified. Then the network for fuzzy analytic network process (ANP) method was constructed. The fuzzy real option value for each alternative was calculated and used in the proposed approach as the representative of the financial dimension. Finally, the preference ranking of alternatives and the relative importance of the criteria were obtained. The significant contribution of the proposed approach is that it integrates the financial dimension (FROV) of the location problem methodologically with the multi-criteria characteristic (FANP) of the problem. Another importance of this study is the first usage of real options valuation in the area of location selection science.

Keywords: Location selection; multi-criteria; fuzzy; ANP; real options valuation; trinomial lattice approach (search for similar items in EconPapers)
Date: 2013
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Citations: View citations in EconPapers (7)

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DOI: 10.1142/S0219622013500272

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