Centralization of the logistics facilities in metropolitan area

The concept of the centralization of the logistics facilities in metropolitan areas relates to the desirable city expectations of the city managers and the cost considerations of the logistics company managers. The decision of the centralization might help the city management improve the traffic problem and improve the environment. Additionally, this decision decreases transportation costs, increasing the logistics firms' competitiveness in the business environment. Thus, the centralization decision can be beneficial for both public and private sectors. The existing literature showed that most studies confirmed that the centralization increases cost benefits. However, few studies showed that the level of the centralization influences the cost parameter or that the centralization concept may not be beneficial at all. Consequently, prior to making the centralization decision, it is necessary to determine the optimum level of the centralization and measure its effects before the decision of centralization is a necessity. The aims of the study are to measure the effects of the centralization decision in metropolitan areas, determine the number of facilities that would serve as logistics centers and find the convenient location for the facilities. To reach these goals, a stepwise methodology is suggested to evaluate the problem structure using literature survey and field study methods to identify criteria that may influence the centralization decision. Subsequently, the level of centralization will need to be determined. The third step involves locating the facilities using the integration of the optimization and fuzzy spatial multi-criteria decision-making approach based on the centralization level, which defines the number of the logistics centers. In the study, Istanbul was selected due to its decentralized logistics network structure. Additionally, its emerging economy makes the city one of the major metropolitan areas in its region. The results showed that the proposed methodology is able to determine the centralization level and allocate the facilities in a metropolitan area. The centralization decision creates cost benefits to companies and decreases total truck travels in the city. The investment can pay itself in about two years. The study extends the existing centralization literature and contributes to the decision-making approaches with the novel solution structure.