CRITICAL EVALUATION FOR THE SELECTION OF 3PL (THIRD PARTY LOGISTICS) SERVICE PROVIDERS UNDER FUZZY ENVIRONMENT

Abstract

Selection of 3PL service providers is a multi criteria decision making (MCDM) problem thus offers lot of challenges to the shippers (users). Evaluation of 3PL service providers and subsequent identification and selection of 3PL service providers depends on the selection criteria and the quality and accuracy of the data. Thus, the decision made by the decision maker or an evaluation team may need a systematic and logistical approach to arrive at a precise and meaningful decision. The Fuzzy Set Theory (FST) and Analytic hierarchy process (AHP) may be combined to ascertain the precise selection of 3P1 service provider. The integrated approach may be very useful in reaching a likely result which can satisfy the decision maker or the team along with shippers. In the present research, a Fuzzy AHP-and LLSM based model is formulated and applied to a case study to resolve the selection issues of a multinational company. Various methods of deriving local weights and global weights viz. fuzzy Analytic hierarchy process (FAHP), fuzzy logarithmic least squares method (FLLSM) and modified fuzzy logarithmic least squares method (MFLLSM) have been employed. The derived priorities of 3PL alternatives using various methods have been critically analyzed and compared for the effective selection. The use of the model indicates that the computed quantitative evaluations can be applied to improve the precision of the selection. Sensitivity analysis, using Expert Choice 11.5 Software, is employed to analyze importance and influence of each criteria and sub-criteria in the selection of best 3PL service providers