A Decision Making Tool for Selection of LSPs

Abstract

This research note aims to propose a multiple criteria decision making (MCDM) based on ELECTRE method to solve the logistics service providers (LSPs) selection problem. In the contemporary global market, this selection represents a strategic process and a complex issue, as it involves various qualitative and quantitative criteria as well as decisions. The proposed model consists of two phases: (1) a survey of French firms was carried out so as to identify the factors that should be considered in the LSPs selection decision; (2) an application of the model, as well as its comparison with the weighted sum, were conducted. The approach uses criteria that are important for the firms that participated to the survey. The results indicate that the ELECTRE method suggests a better ranking of the LSPs than the weighted sum, initially used in the case study. The proposed MCDM model can provide the guidelines and directions for the decision makers to effectively choose LSPs in the current competitive environment. In addition, this study fills a gap in the literature on LSPs selection problem, where MCDM methods are seldom used.