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Research Article

Operation Design and Production Target Setting for New Branches

Shin, Dongeun · Park, Gyeongsam

Published: January 2007 · Vol. 36, No. 2 · pp. 479-497
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Abstract

The opening of new branch locations occurs across a wide variety of business domains, including fast-food franchise outlets, mobile telecommunications service agencies, and bank branches. In general, branches use multiple inputs to produce multiple outputs. Therefore, planning input levels and output levels in advance is necessary for the operation of newly established branches. Determining input levels carries the meaning of operational design, while determining output levels carries the meaning of production (or output) target setting. This paper proposes an approach that simultaneously employs DEA (Data Envelopment Analysis) and Multi-Objective Optimization (MOO) techniques for efficient and optimal operational design and output target setting. The proposed methodology is applied to a case study of Fast-Food Company A to demonstrate its usefulness and applicability to similar problems. The core of this proposal demonstrates that the new branch design problem can be modeled as a MOO problem. Despite the fact that new branch design problems frequently arise in actual business practice, no scientific problem-solving approach has been developed and published. The fact that the problem can be modeled as a MOO problem fundamentally implies that existing MOO solution methods can be utilized, thereby enabling scientific problem-solving.
Keywords: 다목적최적화신규지점운영설계