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The Relocation of A Hybrid Manufacturing/distribution Facility From Supply Chain Perspectives: A Case Study
The Relocation of A Hybrid Manufacturing/distribution Facility From Supply Chain Perspectives: A Case Study
Department of Marketing and Transportation, College of Business, Auburn University, Auburn, AL 36849, USA
Department of Mechanical, Industrial and Manufacturing Engineering, Northeastern University, 375 Snell Engineering Building, 360
Huntington Avenue, Boston, MA 02115, USA
Abstract
In this paper we present a real-world case study involving the re-location of a combined manufacturing and
distribution (warehousing) facility. The relocation decision was called to adapt to dynamic changes in business
environments surrounding the rm's supply chain operations. Such changes include changes in supplier and
customer bases, distribution networks, corporate re-engineering, business climate and government legislation. To aid
management in formulating a more ecient and eective relocation strategy, we designed the conguration of
supply chain networks and assessed the viability of the proposed sites from supply chain perspectives using the
analytic hierarchy process (AHP). # 1998 Elsevier Science Ltd. All rights reserved.
Keywords: Supply chain management; Warehouse location; Analytic hierarchy process
1. Introduction
Due to its strategic importance to the supply chain
competitiveness, the problem of locating manufacturing plants (or warehouses) has received considerable
attention from academicians and practitioners alike
over the last several decades [3, 4, 12, 13]. In general,
the problem of locating manufacturing (or warehousing) facilities is concerned with the determination of
the optimal number, size, and geographic conguration
of those facilities in such a way as to minimize the
total cost associated with supply chain operations (e.g.
start-up investment, material acquisition, transportation, storage and production cost), while satisfying
customer demand requirements. The location decision
usually entails the rm's long-term commitment to the
established facility and thus is not intended to be changed quickly. Due to unforeseen changes in both external and internal business situations, however, some
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Table 1
Local priority scores of prospective sites
Criteria/attributes
(1) Site characteristic
Land capacity and landscaping
Compatibility with the current site
Deed restrictions
Building conguration and size
Room for building expansion
Soil conditions for the proposed sites
(2) Cost
Facility establishment costs
Facility operating and maintenance costs
(3) Trac access
Proximity to on and o ramps to highways
Proximity to main rail lines
Proximity to truck terminals
Proximity to waterway
(4) Market opportunity
Proximity to customers locations
Proximity to suppliers locations
Proximity to competitors' locations
Proximity to other Alpha facilities
Market potential
Prospective sites
Priority scores
Ranks
Harrisburg
Williamsport
Wheeling
Harrisburg
Williamsport
Wheeling
Harrisburg
Williamsport
Wheeling
Harrisburg
Wheeling
Williamsport
Williamsport
Wheeling
Harrisburg
Harrisburg
Williamsport
Wheeling
0.007
0.006
0.005
0.007
0.006
0.004
0.014
0.014
0.013
0.011
0.010
0.009
0.006
0.006
0.005
0.010
0.010
0.009
Williamsport
Wheeling
Harrisburg
Wheeling
Williamsport
Harrisburg
0.038
0.035
0.027
0.028
0.028
0.026
1
2
3
1 (tie)
1 (tie)
3
Harrisburg
Williamsport
Wheeling
Harrisburg
Williamsport
Wheeling
Harrisburg
Williamsport
Wheeling
Wheeling
Williamsport
Harrisburg
0.024
0.012
0.008
0.032
0.019
0.013
0.046
0.012
0.004
0.020
0.015
0.010
1
2
3
1
2
3
1
2
3
1
2
3
Harrisburg
Williamsport
Wheeling
Harrisburg
Williamsport
Wheeling
Williamsport
Wheeling
Harrisburg
Harrisburg
Williamsport
Wheeling
Harrisburg
Williamsport
Wheeling
0.020
0.010
0.007
0.013
0.012
0.011
0.011
0.007
0.002
0.015
0.015
0.006
0.022
0.010
0.003
1
2
3
1
2
3
1
2
3
1 (tie)
1 (tie)
3
1
2
3
1
1
1
1
1
1
1
2
3
1
2
3
(tie)
(tie)
3
1
2
3
(tie)
(tie)
3
(tie)
(tie)
3
continued opposite
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Table 1continued
Criteria/attributes
Prospective sites
0.013
0.008
0.004
0.012
0.009
0.005
0.009
0.008
0.008
0.027
0.010
0.009
1
2
3
1
2
3
1
2 (tie)
2 (tie)
1
2
3
Williamsport
Wheeling
Harrisburg
Harrisburg
Wheeling
Williamsport
Williamsport
Wheeling
Harrisburg
Harrisburg
Wheeling
Williamsport
Wheeling
Williamsport
0.028
0.014
0.009
0.012
0.006
0.002
0.008
0.006
0.006
0.012
0.006
0.002
0.026
0.017
1
2
3
1
2
3
1
2 (tie)
2 (tie)
1
2
3
1
2
Site characteristics
Cost
Trac access
Market opportunity
Quality of living
Local incentives
insensitive
sensitive
a little sensitive
insensitive
sensitive
sensitive
Ranks
Williamsport
Harrisburg
Wheeling
Wheeling
Harrisburg
Williamsport
Wheeling
Williamsport
Harrisburg
Williamsport
Wheeling
Harrisburg
4. Sensitivity analysis
Location criteria
Priority scores
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Acknowledgements
The authors wish to thank Charlotte Chancellor of
the Conway Data, Mary Burkholder of the Maryland
Department of Business and Economic Development,
Stephen L. Christian, Jr. of the West Virginia
Development Oce, Sheila Cerulli of the Pennsylvania
Power and Light Company, Carol Kilko of the Capital
Region Economic Development Corporation and
Charles Van Keuren, Jr. of the Lehigh Valley
Economic Development Corporation for providing the
authors with invaluable data and insights into the site
feasibility and evaluation studies. Also, the authors
want to express the deepest gratitude to the management team and trac manager of the anonymous company for providing the authors with valuable
assistance in the case study reported in this paper. Last
but not least, the authors want to thank three anonymous reviewers for their invaluable comments on an
earlier version of the paper.
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