The facility location problem from the perspective of triple bottom line accounting of sustainability

Abstract

Design of facilities network, allocation of customers to be served from the facilities and their operations have strong economic, environmental and social impacts. Although the decisions in the facility location problem may have varying effects on these impacts, simultaneous consideration of these effects in the early stages of decision-making for facility location selection and network plan has attracted limited attention in the facility location decision literature. Specifically, the social dimension and mathematical modelling are rarely used. In this paper, we present a decision support framework for the facility location problem that incorporates the triple bottom line accounting of sustainability. The framework is a valuable integration of mathematical modelling embedding the criteria with proper measurement indicators in a multi-objective model, perspectives of the related stakeholders, any thresholds and assumption, model analysis, and the decision-maker strategy to find the best-fit alternative. We demonstrate our methodological approach to establish a supply network for digital products in Turkey using real data. The results indicate that the method can balance the economic, environmental and social pillars, based on limitations of the three pillars and strategic perspective of the decision-maker. The decision-maker can interpret the interactions among the three pillars of sustainability and can make his decision by analysing the balance between them.