Plant Location Decision with Analytic Hierarchy Process

Abstract

The objective of this research is to propose method for plant location decision with Analytic Hierarchy Process (AHP). The AHP is applied to case study of plant location decision for cassava processing plant. With AHP, the plant location decision in this case study is analyzed with the four-step approach of AHP. For the first step, this decision problem is broken down into Hierarchy of Interrelated Elements with four levels. The 1^st level is the goal level that is the good location for cassava processing plant. The 2^nd level is the main factor level that are Monetary factors and Non-monetary factors. The 3^rd level is the sub factor level that consists of two sub factors (Initial cost and Annual cost) for Monetary factors and six sub factors (Material availability, Utility system, Labor availability, Community attitude, Marketing advantage and Land advantage) for Non-monetary factors. The 4^th level is the alternative level that are Land in Nakhon-Ratchasima, Land in Kalasin and Land in Rayong. For the second step, a group of decision makers carefully gives decision data with a pair-wise comparison technique. For the third step, all decision data from the second step are transferred into the weight of each factor. For the last step, the weight of each alternative land is calculated under the goal level and the good location for cassava procession plant can be systematically selected. Finally, the calculation results show that the land in Nakhon-Ratchasima is the good location for cassava procession plant.