This study investigated six international distribution center (DC) selection factors from a foreign market perspective and presented a weighted fuzzy factor rating system (FRS) suitable for solving such problems. An evaluation procedure is illustrated to demonstrate that our procedure is an effective approach in a group decision-making process. In contrast with classic decision-making theory, this method applies fuzzy weighting to assess individual decision makers (DMs) which allows managers to consider the professional or experience of each DM in the decision-making procedure. In the example presented here, the final solution is then obtained by identifying the best international distribution center for further evaluation and negotiation.
Global competition in international trade poses significant challenges to companies which must rapidly respond to changing marketplace requirements. Effective supply chain management (SCM) enables companies to satisfy such requirements. International distribution centers (DCs) offer numerous advantages to shippers, including storage, inland transport service, customs clearance service, consolidation, packaging, labeling and assembly services. In supply chain design and management, especially worldwide SCM, the role of international distribution centers is increasingly important in transportation and distribution of merchandise.
Classic decision-making theory assumes that managers investigating a potential distribution center (DC) would first identify relevant evaluative criteria appropriate for appraising a range of foreign market options. Managers would then assign importance weights to the identified criteria. Specific information about international DC reality or performance related to relevant criteria would then be collected. Finally, one or more criteria would be applied to identify the best target international DC (Armstrong, 1970, Green and White, 1976, Harrell and Kiefer, 1981 and Hodgson and Uyterhoeven, 1962). The majority of these criteria, weight and decision rules are evaluated by human perceptions and judgments which cannot be quantified precisely (Dubrin, 2002). As such, international distribution center selection (DCS) processes typically involve the imprecision/vagueness inherent in linguistic assessment and multiple attribute decision-making (MADM).
In MADM, a given set of alternatives to be assessed with respect to specific attributes is assumed. In reality, the importance of individual decision makers (DMs) against a decision-making attribute may not be equal or uniform. Sometimes there are DMs/experts on specific issues in a decision group, such as the executive manager of operations department on DC selection issues, or some experts who are more experienced than others. Notably, the final outcome of the group decision-making (GDM) process may be markedly influenced by the degree of importance of such individual DMs. A good method for aggregating the various influences of individual opinions, evaluation, and rating from multiple DMs thus must be considered in DC selection problems. This study therefore proposes a fuzzy weight assessment to individual DMs adequately respond to multiple expert opinions.
This study investigates three aspects of fuzzy decision-making procedure from a foreign market perspective for international DC selection problems with GDM processes. The initial inquiry is the evaluative criteria experts generally consider relevant for appraising an international DC. Second, the important weights of different DMs on specific attributes/criteria and on the ratings of alternatives need not be uniform where fuzzy assessments and multiple expert opinions are considered. Third, once potential criteria are identified, the proposed decision support system employs simple fuzzy methodology incorporating a judgmental decision-making process to evaluate such criteria and is also appropriate for appraising alternative target international DC. Specifically, this study presents empirical evidence which elucidates the perceived relative importance of potential evaluative criteria within the international DC selection decision-making process.
The remainder of this paper is organized as follows. Section 2 discusses the related literature. Section 3 then describes a review of fuzzy set theory (FST). Next, Section 4 introduces and describes the procedures of the proposed weighted fuzzy factor rating system (FRS) under GDM situation. Subsequently, Section 5 illustrates the procedures of the proposed system using an empirical example. Finally, conclusions are drawn in Section 6.
This study investigated six attributes of an international DC, including service; market potential; transportation and distribution systems; environmental factors; infrastructure and culture as DC selection factors from a foreign market perspective. An effective weighted fuzzy FRS method was then proposed for solving such a problem under a fuzzy group decision environment. International DC selection involves decision making at strategic and management levels, and the subjective, vague and imprecise assessments commonly involved in the process are naturally fuzzy. Fuzzy assessment expressed in linguistic terms are frequently intuitive and effective for DMs during the process of evaluating the above six selection factors. Additionally, the proposed system assesses individual DMs, which permits management to consider the profession or experience in the decision-making procedure.
The merits of the proposed method are three-fold: First, the proposed approach reduces the complexity of traditional methods for ranking fuzzy numbers, resulting in a more efficient decision-making process. Second, the proposed approach is the only method formulating a fuzzy weight to support the DMs’ professional experience, which is the essence of managerial capability and also a feedback mechanism of the management system in weighted fuzzy FRS under a GDM situation. The discussion applied this study also demonstrates the importance. Third, the proposed approach considers both quantitative and qualitative criteria can adequately handle the inherent uncertainty and imprecision of the human decision-making process. The novel architecture of weighted fuzzy FRS can be applied facilitate decision-making in other management problems as well.
A possible direction for future research is developing a computer-based expert decision support system for the proposed approach, which would employ weighted fuzzy FRS to link and translate the strategy supporting roles and the selection criteria for competitive strategies.
