Selection of 3PL service providers: a combined approach of AHP and Graph theory

3PL service provider helps the shippers in achieving their strategic objectives hence becoming vital in the logistics outsourcing. Shippers need to have a careful evaluation and selection before offering an important outsourcing contract. The selection process involves the identification of potential criteria and performance assessment of 3PL service providers with reference to selected criteria thus necessitates systematic methodology. The present work, proposes a methodology based on combined approach of Analytic Hierarchy Process (AHP) and Graph theory. A LSP selection index which evaluates and ranks the 3PL service providers have been derived to help shippers. The paper also proposes coefficients of similarity, coefficients of dissimilarity and the identification sets for further comparison of 3PL service providers. A real case problem of a MNC has been illustrated to help the logistics managers for their logistics outsourcing assignments.

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