Development of an Integrated Framework for Facility Relocation Problem: A Case Study

Document Type: Research Paper

Authors

1 Faculty of Management studies, University of Delhi, Delhi, India

2 KPMG Advisory Services Pvt. Ltd., Pune, India

Abstract

The present study has developed an integrated framework for handling a facility relocation problem by combining quantitative modelling methodology with the factor rating technique. It has demonstrated the framework with reference to a real case of a corrugated box manufacturing plant. The first phase of the integrated framework involves evaluation of supply chain cost including inbound logistics cost, in-plant operations cost, and outbound logistics cost of the existing location and two other candidate locations. A mixed integer linear programming model was formulated to reflect the above problem. Sensitivity analyses were also carried out on different parameters in order to test the behaviour of the model in respect of total cost. The second phase involves evaluation of both quantitative and qualitative factors across all three locations by a team of experts on a common scale. The outcome of the first phase expressed in terms of quantitative elements of cost enabled the experts to suitably evaluate the candidate locations on cost dimension on the common scale. Finally, the composite score is computed for all three locations which aids location planners in making a realistic comparison among the three locations. Towards the end, managerial implications of the findings are discussed.

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