W2.1_UDS_Choosing a New Fuel Terminal Location in Dumai Using Additive Weighting Technique in Multi-Attribute Decision Making

  1. Problem Evaluation

Location of the new Fuel Terminal is one critical factor that determines operational success. Especially in build new fuel terminal, we must consider at least two aspects such as land aspect and sea aspect. The fact is very hard to find the location that has both aspects perfectly like example building project of a New Fuel Terminal in Dumai. But if we get the best one it has already bought or developed, so we have to choose the optimum location.

  1. Development of feasible alternatives

In the beginning there are three alternative locations in Dumai for build new Fuel Terminal, among others:

  1. Patra Dok Dumai
  2. Beside Refinery
  3. Beside Existing Terminal

Figure 1. Alternative of a New Fuel Terminal Location in Dumai

Our purpose is build a sea feed Terminal so the third alternative which don’t have coastline can be eliminated. So The Team will choose two locations to build new Fuel Terminal to meet minimum operational criteria.

  1. Development the outcome for each alternative

Choosing the optimum location is decision making strategy. There are some theories in Multi-Attribute Decision Making that can help us to find the optimum (Table 1). In this case we use “Additive Weighting Technique” because base on our team discussion each criteria have different relative importance. With this technique we can find the best (Optimum) location based on calculation between weighted / rank and scoring of the criteria.

Table 1. Multi-Attribute Decision Making Technique

The find the best location by using Additive Weighting Technique, First we have to do is select the criteria of land and sea aspect. Second, we make a weighting of the criteria. Weighting criteria may come from proportional rank of the criteria or expert judgment. Third, we give a number (Likert scale 1-3) in every criteria and time it with the weighting of every criteria. So we can choose the location with the highest score.

Table 2. Additive Weighting Technique Step

  1. Selection of criteria

Summary result of the weighting criteria each alternative as follow :

Table 3. Weighting Land Aspect Criteria

Table 4. Weighting Sea Aspect Criteria

Base on sum result of Table 3 and Table 4, Patra Dok Dumai location gets the highest score.

  1. Analysis and comparison of the alternative

Additive weighting calculation show Patra Dok Dumai location gets higher score in sea aspect criteria but lower score in land aspect criteria. It indicate this location is not the best but the optimum alternative that we have.

  1. Alternative selection

Choose the optimum not the best alternative is not a bad decision. It could be happen as long as they pass minimum requirement of operational success and we already prepare all of the mitigation of the risk.

  1. Performance monitoring & Post Evaluation Result

Even we already have the chosen alternative base on operational aspect also we have to evaluate the alternative base on economic aspect. Maybe in economic view our alternative not feasible to run so must go back to beginning and do this iteration until we get feasible alternative both on operational and economic aspect.

  1. References
    1. Planning Planet. (2017). Multi-Attribute Decision Making. Retrieved from http://www.planningplanet.com/guild/gpccar/managing-change-the-owners-perspective Figures 8-14
    2. Sullivan, G. W., Wicks, M. E., &Koelling, C. P.(2014). Engineering economy 16th Edition. Chapter 14 – Decision Making Considering Multiattributes., pp.559-608.
    3. Norris, G. A., & Marshall, H. E. (1995). Multiattribute decision analysis method for evaluating buildings and building systems. National Institute of Standards and Technology.

3 thoughts on “W2.1_UDS_Choosing a New Fuel Terminal Location in Dumai Using Additive Weighting Technique in Multi-Attribute Decision Making”

  1. OK Pak Dhanu, MUCH better job this time. The only part that kept you from getting 5 stars is you still are confusing Step 4- Selection Criteria with Step 5- Analysis of the Alternatives.

    In Step 4 you should have explained that to get the optimum, you were going take the sum of the two attributes (Land and Sea) and select the location with the highest total value, even if one scored lower in one area than the other.

    Then what you have shown in Step 4 should have been moved to Step 5.

    But other than that, you have covered all the important aspects and you have the minimum of three references and they were formatted appropriately using APA style.

    Bottom line, great job on your fix and looking forward to your next posting showing us the economic analysis.

    Dr. PDG, Jakarta

  2. PS Before you post your next blog, I urge you to go to Chapter 1 in Engineering Economy and review what you should be showing or including in each step. Very important that you master this 7 step process as it forms the basis for the responses to your essay questions on both the AACE and Guild certification exams as well as helping with your paper.

    Dr. PDG, Jakarta

  3. PSS Pak Dhanu, I just noticed another item that should have gone into Step 4- Selection criteria and that is your statement “Our purpose is build a sea feed Terminal so the third alternative which don’t have coastline can be eliminated.”

    In step 4, you should have listed “Must be located on the coastline”. Meaning any alternative NOT on the coastline is automatically ELIMINATED, which is exactly what you have shown.

    I hope this helps you understand what Step 4 is all about? That it establishes the ACCEPTANCE CRITERIA or MINIMUM ACCEPTABLE REQUIREMENTS for an alternative to be considered and evaluated?

    Dr. PDG, Jakarta, Indonesia ………….


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