Journal
INTERNATIONAL JOURNAL OF PRODUCTION ECONOMICS
Volume 121, Issue 1, Pages 112-120Publisher
ELSEVIER SCIENCE BV
DOI: 10.1016/j.ijpe.2008.03.013
Keywords
Fourth party logistics (4PL); 4PL operating models; Multi-criteria decision making; Choquet integral; Outsourcing in logistics
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By being a supply chain integrator who can assemble and manage the resources, capabilities, and technology of its own organization with those of complementary service providers, fourth party logistics (4PL) providers deliver comprehensive supply chain solutions and form an important option for business outsourcing. The adequate design of the partnership between companies in this type of outsourcing activities is essential. In order to support the effective usage of 4PL services, this paper proposes an analytical multiple criteria decision making approach to evaluate 4PL operating models. While decision criteria and their hierarchy were identified it is observed that there exist, interactions, e.g. simultaneous satisfaction of two or criteria is sometimes required. This situation can not be handled with traditional multi-criteria decision making methods which assume criteria independence. 2-additive Choquet integral is appropriate to model criteria interactions by pairs and is used in this study. The proposed framework is applied for a logistics company willing to expand its operations. Finally, an application is provided to demonstrate the potential of the methodology for 4PL operating model selection. (C) 2009 Elsevier B.V. All rights reserved.
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