Decision support framework for the regional facility location and development planning problem

David Kik (), Matthias Gerhard Wichmann and Thomas Stefan Spengler
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David Kik: Technische Universität Braunschweig
Matthias Gerhard Wichmann: Chemnitz University of Technology
Thomas Stefan Spengler: Technische Universität Braunschweig

Journal of Business Economics, 2022, vol. 92, issue 1, No 5, 115-157

Abstract: Abstract Location choice is a crucial planning task with major influence on a company’s future orientation and competitiveness. It is quite complex, since multiple location factors are usually of decision-relevance, incomparable, and sometimes conflictual. Further, ongoing urbanization is associated with locational dynamics posing major challenges for the regional location management of companies and municipalities. For example, respecting urban space as location factor, a scarcity growing over time leads to different assessment and requirements on a company’s behalf. For both companies and municipalities, there is a need for location development which implies an active change of location factor characteristics. Accordingly, considering locational dynamics is vital, as they may be decisive in the location decision-making. Although certain dynamics are considered within conventional Facility Location Problem (FLP) approaches, a systematic consideration of active location development is missing so far. Consequently, they may propagate long-term unfavorable location decisions, as major potentials associated with company-driven and municipal development measures are neglected. Therefore, this paper introduces a comprehensive decision support framework for the Regional Facility Location and Development planning Problem (RFLDP). It provides an operationalization of development measures, and thus anticipates dynamic adaptations to the environment. An established multi-criteria approach is extended to this new application. A complementary guideline ensures its meaningful applicability by practitioners. Based on a real-life case study, the decision support framework’s strength for practical application is demonstrated. Here, major advantages over conventional FLP approaches are highlighted. It is shown that the proposed methodology results in alternative location decisions which are structurally superior.

Keywords: Facility location problem; Systematic location development; Multi-criteria decision making; Empirically sound guideline; Case study (search for similar items in EconPapers)
JEL-codes: L60 R30 (search for similar items in EconPapers)
Date: 2022
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Citations: View citations in EconPapers (2)

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DOI: 10.1007/s11573-021-01050-z

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