Retail Chain Stores Location using Integrated Interval-Valued Intuitionistic Fuzzy AHP and TOPSIS: Case Study Ofogh Kourosh Stores

Retailers are one of the most powerful agents of product distribution due to their proximity to final consumers and the potential to create a market. Choosing the location of the retail store is a strategic decision and a long-term investment, both in terms of customer satisfaction and the profitability of the company in the conditions of market change and fierce competition. Considering the increasing complexity of the problem by combining different criteria in choosing the location of the retail store, it is inevitable to use multi-criteria decision-making structure. The purpose of this study is to develop a method to select the best retail store locations in Ofogh Kourosh retailing through strategic ranking of potential store locations using criteria such as population, store location characteristics, economic considerations, and competition.

Due to the increasing complexity of the retail store location selection problem and the uncertainty in evaluating the criteria in the retail store location selection, the multi-criteria decision-making structure has been used along side fuzzy intuitionistic approach. In fact, intuitionistic fuzzy numbers are extended version of fuzzy numbers in which except for the membership and nonmembership degrees, hesitation degree is also considered in modeling uncertainty for the decision-maker. In the proposed model of this study, five criteria including cost, competition, traffic density, vehicle traffic volume, physical characteristics and store location have been selected as the main criteria for choosing the best retail store location through interviews with experts. Twelve sub-criteria including rent cost, equipment cost, power of competitors, number of competitors, distance to competitors, volume of car traffic, volume of pedestrian traffic, store size, parking space, proximity to main street, proximity to commercial centers and proximity to residential complex are selected in order to choose the best location among five potential locations.The presented method is a combined method of Analytical Hierarchy Process method and Technique for Order of Preference by Similarity to Ideal Solution (AHP-TOPSIS) based on interval valued intuitionistic fuzzy sets, have been used in order to evaluating the criteria and ranking of the proposed option. In order to consider the uncertainty in the selection of decision makers and to calculate the weight of the criteria, the AHP method based on interval Intuitionistic fuzzy sets has been applied. Also, the prioritization of the proposed options for locating a new retail store has been calculated using the TOPSIS method. In the considered case study, Region 4 of Tehran city is considered as the most populous region in the city so that Ofogh Koorosh retail company has 40 stores allocated to two big warehouses in this region.

Based on the numerical result, the sub-criteria of rent cost from the criteria of cost and the sub-criteria of proximity to trade centers from the criteria of store location were selected as the most important and least important criteria. The results showed that candidate locations four and one were selected with highest and lowest priorities for establishing the stores. With respect to the need for validation of the proposed method, the results of the evaluation of the potential locations have been compared with the combined method of Analytical Hierarchy Process and Weighted Aggregated Sum Product Assessment (AHP-WASPAS) based on Interval Valued Intuitionistic Fuzzy Sets; In both methods, potential location number 4 has been chosen as the best location for a new retail store and potential location number 1 as the most inappropriate location due to its location and competitors' conditions.