Performance evaluation for third-party logistics providers

Abstract

In this paper, the strategic selection of a third-party logistics provider (3PLP) from among many 3PLP candidates is made based on the performance evaluation using a synthesis criterion system, which consists of 15 criteria. A grade is assigned to each criterion for each provider according to its performance. Through pair-wised comparisons, a pair of candidates is assessed with respect to each criterion. Consequently, 15 relative priority matrices are generated when all the candidates are taken into account. A nonparametric frontiers algorithm with constrained weights is developed to determine eigenvalue attributes for classification criteria. As a result, all 3PLP candidates could be ranked from the most to the least efficient. Two case studies are provided in this paper to show the validity and reliability of the method.