A multi-criteria decision-making framework for assessing the quality and cost of facility layout alternatives: a case study

Abstract

The paper presents a multi-phase framework for assessing the quality and cost of facility layout alternatives. The framework utilizes life-cycle cost analysis (LCCA) and multi-criteria decision-making (MCDM) to account for economical and qualitative aspects. Life-cycle considerations include costs of development, investment, construction or production, usage, and scrapping. A test of the proposed framework was performed at the Swedish Mail Terminal in the town of Alvesta, a part of Posten Sweden AB. The terminal has several space, machine, and operational constraints. Three layout alternatives were developed and evaluated using the suggested framework. Although the selected layout alternative has the highest implementation cost, it yields a 9 per cent better total life-cycle cost than the closest alternative based on a ten year life-cycle length. The originality of this approach is evident in addressing both quantitative and qualitative facility planning issues such as economical and non-economical aspects, using both LCCA and MCDM methodologies. The approach proposed in this paper is not only valuable in this case study, but it can also be generally applied in other similar decision situations.