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Combining decision tree and MAUT for selecting a country for a global manufacturing facility

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  • Canbolat, Yavuz Burak
  • Chelst, Kenneth
  • Garg, Nitin

Abstract

The paper presents a multi-phase approach for selecting a country in which to locate a global manufacturing facility. An influence diagram is used to frame the decision. A decision tree then analyzes uncertainties regarding cost and generates a risk profile. The risk profile becomes one of the measures in an MAUT model that incorporate a wide range of factors. This sequential approach of using the output from a decision tree as input to MAUT is demonstrated with an example involving an auto supplier locating a new plant in one of five countries. Three decision makers were interviewed to determine the weights and the shape of the individual utility curves. The paper identifies, clearly defines, and incorporates a variety of measures for which national data are readily available. This list is broader and less subjective when compared to other examples reported in the literature.

Suggested Citation

  • Canbolat, Yavuz Burak & Chelst, Kenneth & Garg, Nitin, 2007. "Combining decision tree and MAUT for selecting a country for a global manufacturing facility," Omega, Elsevier, vol. 35(3), pages 312-325, June.
    • Handle: RePEc:eee:jomega:v:35:y:2007:i:3:p:312-325
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    7. Bielza, Concha & Gómez, Manuel & Shenoy, Prakash P., 2011. "A review of representation issues and modeling challenges with influence diagrams," Omega, Elsevier, vol. 39(3), pages 227-241, June.
    8. Akpan, Uduak & Morimoto, Risako, 2022. "An application of Multi-Attribute Utility Theory (MAUT) to the prioritization of rural roads to improve rural accessibility in Nigeria," Socio-Economic Planning Sciences, Elsevier, vol. 82(PB).
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    10. Durbach, Ian N. & Stewart, Theodor J., 2009. "Using expected values to simplify decision making under uncertainty," Omega, Elsevier, vol. 37(2), pages 312-330, April.
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