A Multi Criteria Approach for Selecting Third Party Logistics Provider using Analytical Hierarchical Processing (AHP) - Insights from Edible Oil Industry

( Vol-2,Issue-6,June 2016 )

Author(s): Vani Haridasan

Total View : 954
Downloads : 164
Page No: 850-857
DOI:

Keywords:

Analytical Hierarchical Programming, Edible Oil Industry, Multi Criteria Decision Making, Vendor Selection.

Abstract:

Edible oils constitute an important component of food expenditure in every household and thus a big market for the industry. As distribution is mainly dependent on third party logistics, there is an increasing need to analyse the complexity and make decisions pertaining to selecting a new third party logistics provider (3PL). The use of 3PL providers yield some benefits such as reduced logistics costs and fixed logistics assets, improved order fill rates and shortened average order-cycle lengths and cash-cash cycles. Logistics service provider selection is a complex multi – criteria decision making process; in which, decision makers have to deal with the optimization of conflicting objectives such as quality, cost, and delivery time. In this context, this study proposes an evaluation framework and methodology for selecting a suitable 3PL provider using a multi criteria decision making technique - Analytical Hierarchical Process (AHP). The factors that were considered for the study are operational factors, service factors and financial factors in the outbound logistics of the edible oil industry. Four logistics providers were used in this study. The findings of this study provide insights to the logistics managers on the systematic evaluation in the selection of the logistics providers using both qualitative and quantitative factors as well as how to deal effectively when there are conflicting factors.

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