Design of a decision support system to evaluate the investment in a new distribution centre

The Office of the Commission for the Management of Land Traffic (OCMLT), which is a Government body on land traffic control, plans to ban heavy trucks coming into the outer area of Bangkok, Thailand. The logistics firms are in need of models that can guide them on the investment in a new distribution centre (DC). The objective of this research, therefore, is to develop a decision support system (DSS) that can accommodate evaluation models and criteria to evaluate the investment in a new DC. The contribution of this research is in developing a new approach that is flexible and applicable to industries that are planning to invest in a new DC. The evaluation model and criteria have been applied based upon the analytic hierarchy process in association with a Capital Investment Model and a Transportation Model. The DSS will be assessed in collaboration with a leading logistics firm under two constraints, without and with a heavy truck ban (HTB) coming into the outer area of Bangkok. The collaborating firm is a medium to large-scale company. The participating decision makers (DMs) have a solid background in Engineering Management and are at a senior level position, so as to represent experienced DMs. The major results, from the integration of quantitative and qualitative data in the DSS, have demonstrated that without the HTB constraint, the firm should invest to expand its current DC. On the other hand, with the HTB, the firm should invest to use a combination of a truck terminal and its DC. The results, analysis, recommendations and limitations are presented. (C) 2003 Published by Elsevier Science B.V.