A New Hybrid Methodology for Selection of Third Party Logistics

Multicriteria decision making (MCDM) has found many applications in both public and private sector organizations. MCDM is both an approach and a set of techniques, with the goal of providing an overall ordering of options, from the most preferred to the least preferred option. The set of MCDM techniques are implemented in selecting the vendors and 3PL service providers. Supplier selection is a multi-criteria problem which includes both tangible and intangible factors. Proposed approach is based on Fuzzy Analytic Hierarchy Process (FAHP) and MODIFIED REGIME method. FAHP method is used in determining the weights of the criteria by decision makers and then rankings of the firms are determined by MODIFIED REGIME method, we use triangular fuzzy numbers in all pairwise comparison matrices in the FAHP. Hence, criteria weights are calculated as the triangular fuzzy numbers and then these fuzzy criteria weights are inserted to the fuzzy MODIFIED REGIME methodology to rank the alternatives. Proposed method is validated on 3PL vendor selection. The problem is taken from Zhaang, Xiuli (2004), “an application of AHP in 3pl vendor selection of a 4pl system”.