The application of the multiple criteria decision making/aiding methodology to evaluation and redesign of logistics systems

Abstract

The paper presents the methodological background of Multiple Criteria Decision Making/Aiding (MCDM/A) and its practical application in logistics systems. It explains why MCDM/A methodology is important while dealing with different categories of decision problems that arise in those systems. Major features and basic notions of MCDM/A methodology are presented. Different categories of MCDM/A methods are characterized and classified. Two case studies demonstrate possible applications of MCDM/A methodology in logistics. In the first case study multiple objective optimization of the distribution system is carried out and compared with the single objective optimization. The decision problem is formulated as multiple criteria mathematical programming problem and solved by an extended version of MS Excel Solver – Premium Solver Plus. The second case study focuses on the multiple criteria evaluation and ranking of the logistics infrastructure objects, i.e. a set of warehouses – distribution centers. The decision problem is formulated as a multiple criteria ranking problem and solved with an application of ELECTRE III/IV method.