Int. J Sup. Chain. Mgt Vol. 8, No.5, October 2019
168
Comparative Analysis of Multiple Criteria
Decision Making (MCDM) Approach in
Warehouse Location Selection of Agricultural
Products in Thailand
Martusorn Khaengkhan
1
, Chattrarat Hotrawisaya
2
, Bhuk Kiranantawat
3
, Mohd Rizaimy Shaharudin
*4
1-3
College of Logistics and Supply Chain Management, Suan Sunandha Rajabhat University, Thailand
*4
Faculty of Business & Management, Universiti Teknologi MARA, 08400 Merbok, Kedah, Malaysia
1
martusorn.kh@ssru.ac.th
2
chattrarat.ho@ssru.ac.th
3
bhuk.ki@ssru.ac.th
*4
rizaimy@uitm.edu.my
Abstract - The objective of this study was to select the
suitable warehouse location, which is the focus for
business organisations that buy, produce, and store the
agricultural products of grass flowers, by using the
Multiple Criteria Decision Making theory (MCDM).
Three methods were used, which were the Simple
Additive Weighting (SAW), Analytic Hierarchy Process
(AHP), and Technique for Order Preference by
Similarity to Ideal Solution (TOPSIS). Seven main
factors that influence the selection of an agricultural
product warehouse were explored - the size of the area,
land price, labour cost, utilities, the quantity of raw
materials in the area, ease of access to the place, and
distance from the source of the raw materials to the
location. Five areas for the warehouse Chiang Rai
province, Thailand were compared to ascertain the
suitability of warehouse location by using these factors.
The results show that Pa Sang Sub-district, Mae Chan
District (E) was the most suitable for the agricultural
product warehouse. This study can be further applied
to decision making in agricultural businesses.
Keywords - Decision Making, Location Selection, SAW,
TOPSIS, AHP
1. Introduction
Currently, to operate a successful business, one of the
most important business activities is product
distribution. Product distribution is considered an
important activity in the management of supply
chains, which can help increase product value, and
competitiveness in the market [1]. The warehouse
maintains the balance between the demand from
customers and the number of products available. The
demand rate from customers is often unstable and
there are also many other factors involved. In
business operations, uncertain and unstable demand
from customers will cause an imbalance from time to
time. However, if products are stored at the right time,
and in the right quantity and location, the demand
from customers will be met continuously. Every
business, whether in agricultural or industrial
products, is considered important to the economy of
every country. Warehousing is an important activity
in business which can help the business to become
successful.
Grass flowers are the main raw material for the
production of grass brooms. Grass flowers only
bloom once a year according to the season. The time
in which grass flowers can be harvested is from
November to March only, causing the price of the
grass flowers to highly fluctuate. The price of grass
flowers is low during the season due to the large
amount of harvest. However, the price is higher after
the end of the season. As manufacturers need grass
flowers to produce brooms all year round, it causes
suppliers to buy grass flowers as much as possible in
order to have enough grass flowers to meet
manufacturers’ needs throughout the year. Therefore,
suppliers need to find a suitable location for the
establishment of a grass storage warehouse. In this
research, the area in the Chiang Rai province, which
is in the northern region of Thailand, was studied
because it is a province that produces a lot of grass
flowers. There are many suppliers of grass flowers
who need a guideline for selecting a suitable location
for the establishment of a grass storage warehouse
which will help with logistics activity costs.
This study explored the selection of the location for
businesses of grass flowers, which are used in the
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International Journal of Supply Chain Management
IJSCM, ISSN: 2050-7399 (Online), 2051-3771 (Print)
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