A multicriteria logistics-outsourcing decision making using the analytic hierarchy process

Different management pioneers and academicians have stated that an organisation's competitive advantage stems from its ability to identify, concentrate on and develop its core competencies and activities, and outsource anything which is noncore. Outsourcing of logistics systems can contribute to profits by enabling users to maximise financial benefits, focus on core competencies, reduce risk and liability, provide wider coverage and flexible capacity, provide dedicated resources, etc. In this paper, a decision-making model for outsourcing the logistics system was developed using the Analytic Hierarchy Process (AHP). With this technique, several options are considered in the decision analysis that make it possible to adequately evaluate and determine whether outsourcing the logistics distribution may be beneficial or not for the company. The case example given in this paper proves that AHP can be used effectively to analyse the outsourcing decision for logistics distribution. It is expected to provide practitioners with the systematic analysis needed to make this important decision.

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