2.2.
1 Choosing available streets for locating our store
Our team chooses Thu Duc City to open the milk store for some reasons:
Rental prices are almost cheaper than surrounding areas such as District 2,
Binh Thanh district, Go Vap district.
Having a high population density with 10.930 person/km2
The transportation is expanded, with many roads and bridges connecting to
Binh Thanh, District 2, District 9, and Binh Duong province
Figure 2.2.1.1. Thủ Đức City
There are some stores that have the same business model as ours located in Thủ
Đức City, such as:
1. DHA Max: Provinval Road 43, Bình Chiểu Ward
2. Kim Phụng: 367B Tô Ngọc Vân Street, Quarter 1
3. BHG Hiệp Bình: 95 Hiệp Bình Street, Hiệp Bình Chánh Ward
4. Bình Chiểu Milk World: 115 Bình Chiểu Street, Bình Chiểu Ward
5. Đức Huy: 176 Linh Đông Street, Linh Đông Ward
In order to facilitate business, our team needs to pay attention to locations that can
meet the following factors: locating on the main and secure streets, being easy to
grab the attention, wide road for transportation and customer moving… Therefore,
we have selected 4 possible streets: Tô Ngọc Vân, Provincal Road 43, 17 and Đặng
Văn Bi.
Figure 2.2.1.2. Four selected streets in Thủ Đức City
2.2.2. Making decision by using AHP
Thủ Đức City contains four major roads: Tô Ngọc Vân (A), Provincal Road 43 (B),
17 (C), Đặng Văn Bi (D) which are densely populated and have heavy traffic. The
team will rate these routes based on five factors to make the optimal decision by
using AHP:
Accessibility: evaluate road width, traffic volume, and population density.
Location price: think about the expense of renting space.
Competitors: determine the density of surrounding bistro companies.
Distance to distributor: Some products must be transported on time, such as
ice cream, fresh milk, yogurt…
Security: The area where you will rent needs to ensure the safety not only
for your store but also customers
After considering the importance of each factor and the AHP rating scale in Table
2.4, our team evaluates the relationship between the criteria in Table 2.5.
Specifically, the factors that our team considers important are Accessibility (C1),
Location Price (C2), Competitor (C3), Distance to distributor (C4), Security (C5).
Table 2.2.2.1. Intensity of importance
Table 2.2.2.2. Pairwise comparison matrix and normalized pairwise comparison
matrix of score between criteria
A square matrix of order 5: RI = 1,12
λ max=5,236 ; CI = 0,059 and CR = 0,059/1,12 = 5,261% < 10%
Then, our team created a pairwise comparision matrix and normalized one for four
criterias:
Accessibility (C1):
After researching online, there are road width and population density of the ward
of each location:
A: 25m and 14.695 person/km2
B: 15m and 14.935 person/km2
C: 10m and 17.118 person/km2
D: 20m and 13.969 person/km2
Therefore, the results of evaluation between each option are shown in pairwise
comparison matrix and normalized pairwise comparison matrix below:
Table 2.2.2.3. Pairwise comparison matrix and normalized pairwise comparison
matrix for accessibility
A square matrix of order 4: RI = 0,9
λ max=4,024 ; CI = 0,008 and CR = 0,008/0,9 = 0,901% < 10%
Location price (C2):
Based on our online research into rental costs, our team has identified 4 business
premises on 4 respective streets that fall within our desired price range:
A’s total area: 70m2 with 1 ground floor (24,5 millions VNĐ/month)
B’s total area: 80m2 with 1 ground floor (20 millions VNĐ/month)
C’s total area: 100m2 with 1 ground floor (20 millions VNĐ/month)
D’s total area: 80m2 with 1 ground floor (8 millions VNĐ/month)
Therefore, the results of evaluation between each option are shown in pairwise
comparison matrix and normalized pairwise comparison matrix below:
Table 2.2.2.4. Pairwise comparison matrix and normalized pairwise comparison
matrix for location price
A square matrix of order 4: RI = 0,9
λ max=4,192; CI = 0,064 and CR = 0,064/0,9 = 7,111% < 10%
Competitor (C3):
Figure 2.2.2.1. Four selected locations and their competitors
Looking at the figure, we can see that the numbers of competior of each location in
1-kilometer radius:
Location A: 4 competitors
Location B: 6 competitors
Location C: 4 competitors
Location D: 1 competitor
Therefore, the results of evaluation between each option are shown in pairwise
comparison matrix and normalized pairwise comparison matrix below:
Table. Pairwise comparison matrix and normalized pairwise comparison matrix for
competitor
A square matrix of order 4: RI = 0,9
λ max=4,079; CI = 0,026 and CR = 0,026/0,9 = 2,92% < 10%
Distance to distributor:
Figure 2.2.2.2. Four selected locations and their distances to the closet distributors
The distance from the store to the closet supplier:
A is about 750m
B is about 4200m
C is about 1600m
D is about 140m
Therefore, the results of evaluation between each option are shown in pairwise
comparison matrix and normalized pairwise comparison matrix below:
Table 2.2.2.5. Pairwise comparison matrix and normalized pairwise comparison
matrix for distance to distributor
A square matrix of order 4: RI = 0,9
λ max=4,214 ; CI = 0,071 and CR = 0,071/0,9 = 7,934% < 10%
Security:
The results of evaluation between each option are shown in pairwise comparison
matrix and normalized pairwise comparison matrix below:
Table 2.2.2.6. Pairwise comparison matrix and normalized pairwise comparison
matrix for security
A square matrix of order 4: RI = 0,9
λ max=4,087; CI = 0,029 and CR = 0,029/0,9 = 3,228% < 10%
Summarizes the options weight matrix multiplied by the criterion weight matrix
that will give the final result
Table 2.2.2.7. Final result
According to the table above, the most optimal location for the store will be on
street D which is Đặng Văn Bi.
After surveying the available locations on Đặng Văn Bi street, the store will
be located at 145 Đặng Văn Bi Street, Bình Thọ Ward, Thủ Đức City, Hồ Chí Minh
City.
