Warehouse Location for Product Distribution by E-Commerce in Brazil: Comparing Symmetrical MCDM Applications

Abstract

The crisis that affected Brazil as a result of the coronavirus disease 2019 (COVID-19) pandemic impacted several businesses. However, the distribution of products sold by e-commerce is one business that had increased its demand on a large scale. The Southeastern Region of Brazil has a wide territorial extension, a high number of inhabitants, and difficulties with transport logistics. Thus, this work presents a solution for choosing a location for the installation of an e-commerce warehouse, considering three possible locations, in two different Brazilian states: Rio de Janeiro and Sao Paulo. Our main objective is to identify policies that allow a balance in the trade-off between risks and service levels. Specifically, we seek to decrease logistics costs and ensure improvements in services. The choice of a location for a warehouse is a decision problem that can be solved with multiple criteria decision-making (MCDM). Three methods of MCDM have been applied: Fuzzy Decision Approach (FDA), Multi-Attribute Utility Theory (MAUT), and Multi-Attribute Value Theory (MAVT). The reasons for the application of the MAUT and MAVT methods originate from their easy understanding and use, while the concepts of FDA address the consideration of uncertainty. To maintain the simplicity of MCDM application, the FDA model is symmetric, even with symmetrical and asymmetrical fuzzy sets. Important criteria were the distance from capital cities, distance to ports, distance to airports, distance to highways, and the costs of land. Three different locations were considered for the installation of the warehouse. All three methods, FDA, MAUT, and MAVT, resulted in Location 1 as the best location for the installation of the warehouse for the distribution of e-commerce products. A discussion on conceptual qualitative divergences and the small quantitative divergence of results is also included in the conclusions.