The Application of Fuzzy Analytic Hierarchy Process Approach for the Selection of Warehouse Location: A Case Study

Warehouse location selection is a multi-criteria decision problem including both quantitative and qualitative criteria and has a strategic importance for many companies. The conventional methods for warehouse location selection are inadequate for dealing with the imprecise or vague nature of linguistic assessment. To overcome this difficulty, fuzzy multi-criteria decision-making methods are proposed. In this paper, we present a multi-criteria decision making approach for selecting warehouse location under partial or incomplete information (uncertainty). The proposed approach comprises of two steps. In step 1, we identify the criteria and sub-criteria for warehouse location selection to design the fuzzy analytical hierarchy process tree structure. In step 2, fuzzy analytic hierarchy process (FAHP) is used in determining of the weights of the main criteria, sub-criteria and alternatives by decision makers and then selection of the best alternative. This paper shows a successful application of fuzzy analytic hierarchy process to a real warehouse location selection problem of a big company in Iran.