Transformations  in
Business & Economics

Multi-objective Optimization in Location Theory with a Simulation for a Department Store
Willem Karel M. Brauers, Edmundas K. Zavadskas

ABSTRACT. Many methods for normalization in multi-objective optimization are rooted in subjectivity. It is namely the case with the use of weights such as in the additive methods with weights. Also, Reference Point Methods rests on subjective opinions, this time expressed in scores. The MOORA method (Multiple Objectives Optimization by Ratio Analysis) avoids subjectivity at least for discrete analysis. MOORA has as base on the one side ratio analysis, on the other side reference point analysis but with ratios. In the first part dimensionless numbers originate from a non-subjective analysis inside the existing system. In the second part reference point analysis becomes non-subjective through a threefold approach. First, the starting points are the ratios found in the first part. Secondly, the reference point obtains as coordinates existing coordinates of the alternatives (Maximal Objective Reference Point). Thirdly, the distances to the reference point are measured in the most effective way; the solution is almost unique and if necessary consumer sovereignty is fully respected. A simulation on the location of department stores demonstrates the differences between weights, scores and the MOORA method.

KEYWORDS: MOORA, multi-objective optimization, location theory, alternative measurement, discrete alternatives, ratio analysis, sub objectives, reference point method.

JEL classification: C02, C61, E17, O11, P29.