Dear Virginia Perez-Benitez, German Gemar, and Mónica Hernández

I have read your paper

Multi-Criteria Analysis for Business Location Decisions

These are my comments

1- In your abstract you say “The find[1]ngs’ originality comes from the inclusion of dimensions such as climate, security, and technology, which are given little weight in other similar indices, as well as the fresh approach to this decision problem from a business perspective and the combination of methodologies”

Those aspects that you mention, certain for sure, were established in the middle of the last century, and were incorporated in he MCDM methods, long time ago, when researchers realized that the typical cost/benefit analysis was completely obsolete, and ignored reality.

2- In page 1 you say ‘Preferential rankings”

In my opinion nobody does business, investing millions of euros, based on preferences. Selecting a destination for an industry involves research, analysis of domestic and international markets, investigation government facilities to return earnings, available resources, etc. There is no room here for preferences.

3- I have read your article up to this point, and don’t even know which are the 11 criteria, but in my opinion 11 criteria are too little for this analysis, normally you need many more.

4- In page 2 you state “Thus, global cities often become the cradle of new innovative companies that prefer to locate their facilities in places rich in specific knowledge in the early stages of their product cycle”

I completely agree with this.

5- In page 3 “This method facilitates preference rankings of the alternatives under evaluation, as well as being able to consider both quantitative and qualitative criteria’s importance to the decision problem at hand’

Rational MCDM methods are not based on preferences but on how well an alternative satisfies all criteria. And this is not subjective.

6- Well, it is refreshing that you consider many more criteria that the initial 11, and this is very good.

However, as appropriate as it is, you still do not say which is the type on industry to locate, and this is important because it is not the same to build a car manufacturing plant than a textile plant or a beer plant. Each one of them have their own requirements that are normally completely different from others. To define criteria, you need to know the type of plant and get advice from the right technical, financial, environmental departments of the promoter. I know that this is not in agreement to the AHP procedure, but think about it. It is like going to a supermarket to buy groceries for dinner but not knowing what are you going to cook.

Because of this, if your criteria have for instance, aspects like facilities for manufacturing a product, you need to contemplate capability of the different places for export (some sites have their harbours closed because ice in winter), tax policies, story of riots and strikes, distance from the raw material, cost of electricity, transferring your earnings to another country, water availability, cost of electricity, environmental regulations for air, soil and water, legal regulations, etc.

In addition, most of these criteria of yours are not only related but also with a certain interdependency, that is, they are not independent. It appears that you did not know that Saaty, the creator of AHP, said very clearly that AHP requires criteria independency, and it is very easy to demonstrate the validity of his assertion.

7- In page 8 you have a list of 46 criteria, which is very good. However, since you do not say what type on industry will be located in some place, you have a tremendous work working with the 46 criteria, when many of them do not have the least influence in your project. Better not to thin k if you have to add or delate something.

8- In page 9 “This method can address complex decision-making problems involving variables and qualitative data that are difficult to assess”

I am afraid I disagree. AHP cannot solve complex problems simply because its hierarchical structure. It does not agree even approximately to the networking structure of nowadays scenarios, with connections in every sense, and far away of the AHP hierarchical rigid structure, good for the large companies in the 1950/60s, but that no longer exist in the 1980s, let alone today.

The Eigen Value method that you correctly mention, is the only mathematical tool used in AHP, however, it could be misleading for more than three alternatives.

9- In page 8 you have a list of 46 criteria, which is very good. However, since you do not say what type of industry will be located in some place, you have a tremendous work working with the 46 criteria, when many of them do not have the least influence in your project.

11- It is very good that you use statistical techniques to reduce the number of indicators, although it is quite small compared with other problems. What you fail to say, and it is very important, is that using one of those tools you also incorporates in your final set, the largest amount of information contained in the original set of indicators.

12- I believe that using PROMETHEE, one of the best methods, is an excellent choice.

13- “The AHP method was applied to weight the criteria. During this part of the process, a group of recruited experts jointly used the AHP to define the weights for the current decision problem.”

Really is to congratulate the seriousness of this paper in corking with 30 experts. Now, I wonder how they manage when two totally different criteria like ‘Disposable Income” compares with “ Water bacteriological contamination’. Here could be two experts, excellent in their respective fields, field, but how they can reach a compromise, since none of them knows nothing on the other?

At first sight the results appear to be reasonable, however, according to this paper the three selected cities as well as the last cities in the ranking, are, according to this case, the best and the worst wehatever the project could be. For instance, to install a financial institution London and Paris are indeed very good candidates, but what about Frankfort, city that should be here, as well as Luxemburg and Lichtenstein?

If the plant is say, for installing a Portland cement plant, obviously, the best are not those the AHP method which selected London, Paris and Barcelona.

if the project was a textile and fashion clothing, probably Milan or Barcelona would be the first, and so on.

This demonstrates one of the drawbacks of AHP where as I said at the beginning, criteria are decided without considering the alternatives that they must evaluate.

With the richness of information you have I would choose to use objective weights, and of course with criteria congruent with the alternatives.

I hope this can help you

Nolberto Munier