Hub location at Digital Equipment Corporation: A comprehensive analysis of qualitative and quantitative factors

The economic growth of countries in the Asia–Pacific (AP) region has caused many US-based businesses to consider the strategic initiative of setting up facilities therein. In this paper, we describe a study to locate a repair-parts warehouse for Digital Equipment Corporation, a world leader in the computer and electronics market. Digital's management was charged to consider not only the long-term strategic (or qualitative) issues typical of such problems, but they also had to ensure that any facility that is located would also be viable from a freight-cost (or quantitative) perspective. We show how the analytical network process model combined with an optimization model can be used to conduct a comprehensive evaluation of these varied issues.