Asian Research Thesis Index

Abstract

The globalization and saturated domestic markets force international firms to gradually expand their businesses across the borders to capture potential markets. Global Facility Location (GFL) is a crucial and irreversible decision for top management of the global business firms, searching for potential countries in global markets. It, therefore, requires a broader analysis of a large number of influencing criteria. There are hardly any GFL studies focusing on the real world uncertainties, future dynamics and interaction of GFL stakeholders. .  This work is about establishing a new platform for dynamic analysis of GFL problems by screening out the most critical influencing parameters and establishing an initial pattern of Agent Based Modeling (ABM), an ecological modeling approach which considers all the individual components of a system as interacting agents. Models using conventional approaches are developed which showed the need for developing hybrid approaches particularly due to many limitations associated with conventional modeling (like dynamic priorities and stochasticity etc.).Using a hybrid Fuzzy Analytic Hierarchy Process (F-AHP), the parameters initially explored from literature are prioritized and rankings in terms of objective-functions are calculated for a selected set of countries for Global Cement Plant Location Problem (GCPLP). The results of F-AHP models in terms of screened out parameters and Country Objective Functions (COF’s) are used as inputs to the ABM platform. The investor agent senses the country objective-functions (COF’s) in agent-set of countries and moves for plant installation to one with highest COF value. One of the difficulties in working with ABM’s has been the lack of a structured documenting and validation procedure to transparently record and present the detailed procedural steps of Agent Based Modeling and Simulations. This difficulty can be overcome by adopting one of the latest approaches called TRACE which is a format for TRAnsparent and Comprehensive model “Evaludation” (Evaluation + Validation) of ecological/ABM models.  A case of four different cement plant locations are selected and modeled using conventional and hybrid modeling approaches. Routines are coded in respective software of each methodology (e.g. NetLogo®). A real world data from different global databases including the World Bank are used to solve the models. The model solutions are in the form of priority weights calculated for different parameters and the country rankings. However the results of hybrid ABM-GFL are more flexible and comprehensive than other methodologies as it not only considers the mutli-objective nature of the GFL problem but also takes into account the real world ambiguities in data pools and expert opinions and deals with dynamic priorities and stochastic country ratings which are changing over the time span of simulation. The methodology is validated using recommended ABM steps as required in the TRACE format. Moreover statistical tests are also applied to the generated data which not only validate the methodology but also provide more meaningful conclusions. In the end a comparative evaluation of conventional and hybrid methodologies highlights different aspects of the modeling approaches with respect to practical observations and generated results. It has been learnt in this particular study that the factors specifically related to cement industry and the sub-factors of cost are the most sensitive while legal regulations and economic conditions are relatively less critical. The countries having strong lime stone reserves, cheaper fuel costs and good internal marketing positions are, therefore, higher in ranking. Kingdom of Saudi Arabia (KSA) is mostly at the top most position due to its cheaper fuels while China is only marginally lower than KSA because of the lowest initial investment costs. India is also a good competitor mainly because of its stability. Pakistan has strong limestone reserves and a good marketing position. It is noteworthy that results of the hybrid approach are much flexible and more practical than others.

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