Designing a Decision-Making Framework for Facility Location of a Community Mall Using Analytic Hierarchy Process (AHP): A Case Study on Company XYZ

Maureen Cariño, Micah Ramirez, Kathleen Baldoz, Kristina Grace Castillo

Abstract


Retail establishments make the movement and trade of goods, as well as the international capital possible, and selecting a location for these facilities is critical since it determines whether the business will thrive or not. This study used Analytic Hierarchy Process (AHP) in determining the best location for a community mall among pre-selected alternatives. Four main criteria were identified namely physical location, strategic background, market generators, and competition condition. Under the main criterion physical location are the sub-criteria accessibility, lot area, frontage, lot shape, and road use; for the strategic background criterion are sub-criteria urbanization, population size, and household income class; for market generators criterion are sub-criteria residential area, educational establishments, and other establishments; and lastly, for competition condition criterion are sub-criteria number of competitors and distances of competitors.

These factors were determined through a review of related researches and consultation with the management of Company XYZ, a well-known retail industry player and main stakeholder of the research study. The factors were modeled hierarchically and a pairwise comparison was done by experts to determine the weights of importance of the factors. The computed priorities were used as weights of factors for the framework. Finally, the framework was used and a location where Company XYZ can construct their next community mall was chosen. Results of sensitivity analysis demonstrated that the decision was robust.

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References


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