An Integrated Factor Analysis-Technique for Order Preference by Similarity to Ideal Solution for Location Decision in ASEAN Region: A Case Study of Thai Fabric Manufacturing Plant

Abstract

In this paper, we propose an integrated model for selecting a suitable location for fabric manufacturing plants in the ASEAN region. In the first phase, Cambodia, Vietnam and Indonesia were determined as candidate locations for evaluation from the screening process. In this regard, key criteria influencing location decisions were derived using factor analysis of responses extracted from questionnaires. In the second phase, criterion weights were calculated using the rank of centroid (ROC) method. Technique for Order Preference by Similarity to Ideal Solution (TOPSIS) was then used to prioritize three location alternatives, and sensitivity analysis was also employed to verify the stability of the method. Based on TOPSIS method, Vietnam was the preferred location, followed by Indonesia while Cambodia was not recommended. Sensitivity analysis also showed that the proposed model was valid. The findings from this study provided references for enterprises engaged in international location decision making. The results can help them better understand the decision-making process and identify key criteria that can influence location decisions internationally.