The application of Multiple Criteria Decision Making/Aiding methodology in the 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 when dealing with different categories of decision problems that arise in those systems. The major features and basic notions of MCDM/A methodology are presented, while different categories of MCDM/A methods are characterized and classified. Two case studies demonstrate potential 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 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 multiple criteria evaluation and the ranking of logistics infrastructure objects, i.e. a set of warehouses - distribution centres. The decision problem is formulated as a multiple criteria ranking problem and solved with an application of the ELECTRE III/IV method.