Transportation decision making through logistics outsourcing and 3pl selection in an integrated closed-loop supply chain

Abstract

The growing danger of perilous effects of e-waste and newly implemented regulations forces the manufacturing industry to establish and execute product recovery strategy. Extension of existing supply chains to include recovery increases the operations and decreases the efficiency of company. Thus, to enhance the performance, company need to outsource non-value-added services fromthird-party suppliers. In this paper, we propose a generic closed-loop supply chain (CLSC) network to integrate the outsourcing of transportation services from third-party logistics providers in first two stages of the forward channel. 3PL providers are selected by evaluating weights on the basis of company’s selected criteria through analytical hierarchy process (AHP). Then, a fuzzy biobjective mixed integer linear programming problem is formulated to obtain the best trade-off among two objectives:minimizing cost and maximizing performance of outsourced services while optimizing flow in the network. In the globalized world, level of underlying uncertainty is very high and need to be dealt aptly. Therefore, we have formulated a mathematical model in fuzzy environment. The proposed model is validated by a realistic case study using fuzzy multi-objective technique.