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Combining decision tree and MAUT for selecting a country for a global manufacturing facility

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  • Canbolat, Yavuz Burak
  • Chelst, Kenneth
  • Garg, Nitin

Abstract

The paper presents a multi-phase approach for selecting a country in which to locate a global manufacturing facility. An influence diagram is used to frame the decision. A decision tree then analyzes uncertainties regarding cost and generates a risk profile. The risk profile becomes one of the measures in an MAUT model that incorporate a wide range of factors. This sequential approach of using the output from a decision tree as input to MAUT is demonstrated with an example involving an auto supplier locating a new plant in one of five countries. Three decision makers were interviewed to determine the weights and the shape of the individual utility curves. The paper identifies, clearly defines, and incorporates a variety of measures for which national data are readily available. This list is broader and less subjective when compared to other examples reported in the literature.

Suggested Citation

  • Canbolat, Yavuz Burak & Chelst, Kenneth & Garg, Nitin, 2007. "Combining decision tree and MAUT for selecting a country for a global manufacturing facility," Omega, Elsevier, vol. 35(3), pages 312-325, June.
    • Handle: RePEc:eee:jomega:v:35:y:2007:i:3:p:312-325
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    4. John MP van Trijp & Mihaela Ulieru & Pieter HAJM van Gelder, 2012. "Quantitative modeling of organizational resilience for Dutch emergency response safety regions," Journal of Risk and Reliability, , vol. 226(6), pages 666-676, December.
    5. Mohebalizadehgashti, Fatemeh & Zolfagharinia, Hossein & Amin, Saman Hassanzadeh, 2020. "Designing a green meat supply chain network: A multi-objective approach," International Journal of Production Economics, Elsevier, vol. 219(C), pages 312-327.
    6. Assoc. Prof. Dina Çakmur Yildirtan & Esengül Salihoğlu, 2017. "Panel Data Analysis of Exchange Rate for Fragile Five," European Journal of Multidisciplinary Studies Articles, Revistia Research and Publishing, vol. 2, May Augus.
    7. Jiménez, Antonio & Mateos, Alfonso & Ríos-Insua, Sixto, 2009. "Missing consequences in multiattribute utility theory," Omega, Elsevier, vol. 37(2), pages 395-410, April.
    8. Jeong, Byongug & Oguz, Elif & Wang, Haibin & Zhou, Peilin, 2018. "Multi-criteria decision-making for marine propulsion: Hybrid, diesel electric and diesel mechanical systems from cost-environment-risk perspectives," Applied Energy, Elsevier, vol. 230(C), pages 1065-1081.
    9. Mohammad Ehsanifar & David A. Wood & Arezoo Babaie, 2021. "UTASTAR method and its application in multi-criteria warehouse location selection," Operations Management Research, Springer, vol. 14(1), pages 202-215, June.
    10. Wenstøp, Fred & Koppang, Haavard, 2009. "On operations research and value conflicts," Omega, Elsevier, vol. 37(6), pages 1109-1120, December.
    11. Bielza, Concha & Gómez, Manuel & Shenoy, Prakash P., 2011. "A review of representation issues and modeling challenges with influence diagrams," Omega, Elsevier, vol. 39(3), pages 227-241, June.
    12. Zhang, Abraham & Luo, Hao & Huang, George Q., 2013. "A bi-objective model for supply chain design of dispersed manufacturing in China," International Journal of Production Economics, Elsevier, vol. 146(1), pages 48-58.
    13. Akpan, Uduak & Morimoto, Risako, 2022. "An application of Multi-Attribute Utility Theory (MAUT) to the prioritization of rural roads to improve rural accessibility in Nigeria," Socio-Economic Planning Sciences, Elsevier, vol. 82(PB).
    14. Ozgur Turetken, 2008. "Is your back-up IT infrastructure in a safe location?," Information Systems Frontiers, Springer, vol. 10(3), pages 375-383, July.
    15. Patrik Aláč & Martin Čulík, 2017. "Multi-Criteria Decision-Making Model for the Material Flow of Resonant Wood Production," Sustainability, MDPI, vol. 9(4), pages 1-11, March.
    16. Lahdelma, Risto & Makkonen, Simo & Salminen, Pekka, 2009. "Two ways to handle dependent uncertainties in multi-criteria decision problems," Omega, Elsevier, vol. 37(1), pages 79-92, February.
    17. Gokhan Ozkaya & Mehpare Timor & Ceren Erdin, 2021. "Science, Technology and Innovation Policy Indicators and Comparisons of Countries through a Hybrid Model of Data Mining and MCDM Methods," Sustainability, MDPI, vol. 13(2), pages 1-49, January.

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