A retail site location decision process combining GIS and the AHP

Autores UPV
Año
CONGRESO A retail site location decision process combining GIS and the AHP

Abstract

The opening of a new establishment is a critical factor for firms in the retail sector. For this reason, it is crucial to perform a solid analysis of the possible locations for new store openings. This paper presents the development of a methodology for the process of selecting a retail site location that combines geographic information systems (GIS) and the analytical hierarchy process (AHP). First, we conduct an analysis of geodemand, which is used to locate the clients of a product or service. Second, geocompetition is analyzed, which means spatially locating the firm¿s competition. Third, the possible commercial sites are determined by combining the results of the two previous steps, together with the use of kernel density analysis. Finally, depending on the resources available to the firm, multi-criteria decision models are used to help select the best location from among the possibilities identified in the previous analysis steps. The AHP methodology shows that the success factors for a supermarket are related to its location and competition. To demonstrate its practical applications, the proposed retail site location decision process was applied in the Spanish city of Murcia to decide on the location for a new supermarket opening. The results obtained also included sales forecasts. It was possible because of the inclusion of an existing supermarket in the AHP process. Therefore, this methodology is an application of Operational Research in agribusiness.