Abstract
The third party logistics (3PL) suppliers selection is a key issue in sustainable operation of fourth party logistics (4PL). A two-stage auction mechanism is designed for the selection of 3PL suppliers. Different from previous studies, the paper considers risk preference of 4PL integrators during the auction and uses the prospect theory to establish the auction scoring function of 4PL integrators. First, a first score sealed auction (FSSA) mechanism is used to solve the selection problem. However, the results show that FSSA is not an ideal method. Hence, the English auction (EA) mechanism is combined with the FSSA mechanism to form a two-stage auction. The FSSA is taken as the first stage auction, and the EA is taken as the second stage auction, and the two-stage auction mechanism is constructed. The two-stage auction can improve the utility of the 4PL integrator and the auction efficiency. In addition, for the degree of disclosure of attribute weights in the scoring function, two states, complete information and incomplete information is designed. In case analysis, the validity of the designed two-stage auction mechanism is verified. The 4PL integrator can obtain higher utility under the risk-neutral auction than the risk-averse auction. The complete information auction does not make the 4PL integrator obtain higher utility than the incomplete information auction.
Highlights
Under risk aversion of 4PL integrator, in first-stage, first score sealed auction (FSSA) has the same score for each 3PL supplier, and in the second stage, English auction (EA) starts with the starting score 0.1
Comparing the two-stage auction with EA, the starting score in the EA is the score corresponding to the reserved point published by the 4PL integrator
The two-stage auction combines the advantages of the two auction methods, 4PL integrator can choose the 3PL supplier by first performing the FSSA and the EA
Summary
Publisher’s Note: MDPI stays neutral with regard to jurisdictional claims in published maps and institutional affiliations. The fourth party logistics effectively integrates social logistics resources and creates value by influencing the entire supply chain It controls and manages specific logistics services, and proposes a planning solution for the entire logistics process to meet the diverse needs of customers and sustainable goal of supply chain management [1]. This paper considers the risk aversion preference psychology in the 4PL integrator’s auction decision. Individuals are more sensitive to loss than income By considering both the risk attributes and the attributes under a commercial criterion, this paper designs a novel two-stage auction mechanism for supplier selection based on multi-attribute auction and sustainable supply chain management. Risk attributes against the shortlisted suppliers are further considered, and a new ranking method based on grey correlation degree of mixed sequence is proposed to rank the finalists and to select the final winners.
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