Integrated model for selection of third party service providers by global lead logistics providers

Abstract

Selection of service providers has been the focus of a large number of studies. The selection problem contains many criteria. Multi-criteria decision-making tools have come in handy in the synthesis of such problems. One such tool is the analytic hierarchy process (AHP), which can be very useful in reaching a likely result that can represent the subjective opinion of the decision maker. The dependence of AHP on subjective inputs leads us to the need of integrating it with a method – the data envelopment analysis (DEA), which can select vendors objectively with quantitative data inputs. A four-stage model is proposed herein, which blends the AHP and the DEA to arrive at precise results. This work pertains to a selection being made by the fourth party lead logistics provider (LLP) who acts as an integrator. A case from the province of Uttrakhand (India) is used to exemplify the postulates of the proposed model. This is specific to the global scenario in logistics service providers within the ambit of global LLPs.