A Hybrid Multi-Criteria Decision Framework for Selecting Fourth-Party Logistics Service Providers in Fleet Transportation Management: A Case Study in Plastic Resin Manufacturing

Abstract

Since the selection of the fourth-party logistics service providers (4PLs) has become a crucial strategic decision to innovatively enhance the logistics processes and to reduce logistics costs. Despite a growing interest among practitioners and academicians in shifting the outsourcing of the logistics service to 4PLs, few studies have focused on developing a framework for selection and evaluation. This paper contributes to the literature in proposing a hybrid multi-criteria decision framework to select the best 4PLs in fleet transport management service. The proposed framework is divided into four phases. First, the 4PLs selection criteria are identified through literature review and industrial experts in the field. Second, Decision Evaluation and Experimental Laboratory (DEMATEL) is employed to explore the interrelationship among selection criteria as well as to analyze the relative importance weights of criteria. Next, a multi-objective optimization model based on ratio analysis (MOORA) is utilized to rank and select the best 4PLs applicant. Finally, the sensitivity analysis is performed to validate the robustness of the proposed framework. One of the major plastic resin manufacturers in Thailand is used as a case study. This study provides the useful insights for selecting and evaluating 4PLs to practitioners and academicians working on this subject.