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SELECTION OF THIRD PARTY REVERSE LOGISTICS PROVIDER USING

FUZZY EXTENT ANALYSIS

G. Kannan

Associate Professor in Operations and Supply Chain Management,

Department of Business and Economics, University of Southern Denmark, Denmark.

E-mail: gov@sam.sdu.dk ; govindkannan_2001@rediffmail.com

E.mail: gov@sam.sdu.dk
ABSTRACT

Purpose – The purpose of this paper is to propose a structured model for the selection third
party reverse logistics provider under fuzzy environment for the battery industry which
establish the relative weights for attributes and sub-attributes.

Design/methodology/approach – This paper uses fuzzy extent analysis to solve the third
party reverse logistics provider selection problem.

Findings – Due to growing environmental legislations, the reverse logistics has attained more
importance among practioners and academicians. The important decisions related to the
reverse logistics is whether the company should maintain the separate reverse logistics
system or it can be outsourced. Since, the reverse logistics takes 12 times as many steps to
process returns as it does to manage outbound logistics(Accenture supply chain management
practice). Due to this many companies decided to outsourse the reverse logistics activities or
functions through third party reverse logistics provider. This work aims in selecting the best
third party reverse logistics provider using fuzzy extent analysis.

Research limitations/implications – Fuzzy extent analysis is a highly multifaceted


methodology which requires more numerical calculations which increases the time to take a
decision. Limitation of this work is that in this study only fuzzy extent analysis has been
concentrated and other multi-criteria decision-making (MCDM) methods such as VIKOR,
TOPSIS and ELECTRE can be applied in a fuzzy environment for solving such problem.

Originality/value – In this research, 7 attributes and 34 sub-attributes are considered and the
interpretation of reverse logistics attributes in terms of their pair wise comparisons has been
carried out. Those attributes possessing lower priorities in the fuzzy extent analysis need to
be taken care on a selection of best 3PRLP.

Keywords - 3PRLP, Supply Chain Management, Reverse Logistics, AHP, fuzzy extent
analysis.
Paper type - Research paper
1. INTRODUCTION

In the recent years the importance of reverse logistics has increased the responsibility
of organizations. Because of changes in legislation, both for environmental protection and for
economic and service reasons, an increasing number of companies now take into account
reverse flows, going backwards from customers to point of origin or recovery centers, within
their logistics systems (Rogers and Tibben-Lembke, 1998; Fleischmann et al., 2000).

Given that RL is not the firm's core activity, one of the most important decisions to be
taken by any producer is whether or not to outsource such functions to a third-party reverse
logistics provider (3PRLP). This typically is an irreversible decision, because the chosen
strategy, once adopted, will not be changed frequently. The management of returns is
complicated by the substantial uncertainties associated with their timing, volume and
condition (Serrato, 2007). Richard (2001a) examines a number of environments in which
strategic planning models, sometimes with associated regulatory intervention, have been
suggested to counter the growing problem of waste and its effects on the environment. It is
not a new industrial practice but has recently received growing attention, as more companies
are using it as a strategic tool to get more profit, to avoid any waste and even benefit the
customer relationship (Andel, 1997; Klausner and Hendrickson, 2000).
Reverse Logistics mainly concern with returned products. Reverse logistics can be
defined as the reverse process of logistics (Luttwak, 1971). Traditionally, reverse logistics
has been viewed primarily as the process of recycling products. Today, definitions vary
depending on what company or segment of industry is attempting to define it. Retailers see
reverse logistics as a way to get product that has been returned by a consumer back to the
vendor (Buxbaum, 1998). Manufacturers tend to view reverse logistics as the process of
receiving defective products or reusable containers back from the user. CLM defines reverse
logistics as “The process of planning, implementing, and controlling the efficient, cost
effective flow of raw materials, in-process inventory, finished goods and related information
from the point of consumption to the point of origin for the purpose of recapturing value or
proper disposal”(Rogers and Tibben-Lembke, 1998). Reverse logistics has become an
important entity and plays an important role in company’s competitive advantage and making
the pursuit of their function a strategic decision (Schwartz, 2000). It does not include
disposition management, administration time and cost of converting unproductive returns into
productive assets. This also gives rise to the situation for outsourcing. Hence, reverse
logistics is necessary for handling and disposition of returned products and information. The
general reverse logistics chain is shown in the Fig. 1.

Distribution Production Supply

Use

Collection Selection Re-processing Re-distribution Re Use

Disposal

Figure 1: The Reverse Logistics Chain

Outsourcing to a 3PRLP has been identified as one of the most important


management strategies for reverse logistics networks in the recent years. While considering
outsourcing decisions for reverse logistics, the fundamental factor to be considered is whether
there is a reliable 3PRLP for the type of reverse logistics network required. Even though there
are several 3PRLPs in some of the scenarios such as pharmaceuticals, container reuse,
cellular telephone reuse, electronic goods, automobiles and computers etc., one of the most
important issue in reverse logistics systems is that some of them are not really prepared to
effectively address the service needs due to the lack of knowledge in reverse logistics
networks. Outsourcing makes the firm to concentrate on reverse logistics activities in order to
earn the customers reputation through immediate response. Due to the complexity of the
process, reverse logistics activities can effectively be accomplished by involving a 3PRLP,
which specializes in these activities and can take advantage of the economies of scale to
convert reverse logistics functions in a profit-creating activity into the closed-loop chain.
This paper presents a structured model for evaluating the 3PRLP selection for battery
industry located in southern part of India using Fuzzy extent analysis. In this research after
introduction of the literature review is given in section 2. Section 3 describes the problem and
3PRLP model. Section 4 describes the solution methodology. In Section 5 the application
model and result analysis are discussed and conclusion of the paper is discussed in section 6.
2. LITERATURE REVIEW
The literature review is mainly aimed at identifying the attributes and sub attributes
that need to be considered in 3PRLP selection process, which has the impact on the
organizations strategic goal. Various attributes and sub attributes used in this study has been
found in literature and finalized through discussions made with the organization outsourcing
group.
The following table 1 show the attributes of selection criteria, relevance in 3PRLP
selection process and the references in detail. This table is adopted from the study done by
Kannan (2009) in his earlier work using AHP.
Table: 1 Attributes & Sub-Attributes
Attributes Sub-Attributes
Third party Inventory Replenishment (3PLS1), Dowlatshahi (2000),
logistics Warehouse Management (3PLS2), Van and Zijm (1999),
Services Shipment Consolidation (3PLS3), Carrier Kleinsorge et al. (1991),
(3PLS) Selection (3PLS4) and Direct Gunasekaran et al. (2001),
Transportation Services (3PLS5) Davis and Gaither (1985),
Gupta and Bagchi (1987),
Khoo and Mitsuru (2006)and
Holguin (2002)
Collection (RLF1), Packing (RLF2), Schwartz (2000),
Reverse Storage (RLF3), Sorting (RLF4), Dowlatshahi (2000),
Logistics Transitional Processing (RLF5) and Jeffery and Ramanujam (2006),
Functions Delivery (RLF6) Kaliampakos (2002),
(RLF) Schwartz (2000),
Jules (1990) and
Stock (1990)

Reclaim (OR1), Recycle (OR2), Laura meade and Sarkis (2002),


Organizational Remanufacture (OR3), Re Use (OR4) Dowlatshahi (2000),
Role (OR) and Disposal (OR5) Dowlatshahi (2000),
Demir (2003) and
Schwartz (2000)
Effective Communication (US1), Service Mohr (1994), Bensaou (1993)
User Improvement (US2), Cost Saving (US3) Monczka et al. (1993),
Satisfaction and Overall working Relations (US4) Gunipero (1990)
(US) Lynch (2000),
Boyson et. al. (1999),
Langley et al. (2002),
Andersson and Norrman
(2002), Boyson et al.,(1999)
Customer Satisfaction (IU3PL1), Razzaque and Sheng (1998),
Impact of use Frequently Updating (IU3PL2), Hendrik et al. (2006), Lynch
of 3PL Profitability (IU3PL3) and Employee (2000), Boyson et al. (1999)
(IU3PL) morale(IU3PL4) and

Mohrman and Glinow (1990)

Organizational Quality (OPC1), Cost (OPC2), Time Kim et al. (2004),


Performance (OPC3), Flexibility (OPC4) and Kwang et al. (2007), Andersson
Criteria (OPC) Customer Satisfaction (OPC5) and Norrman (2002), Lynch
(2000), Boyson et al. (1999),
Lynch (2000), Langley et al.
(2002), Boyson et al. (1999),
Stock. et al. (1998),
Kleindorfer and partovi (1990)
and
Stank and Daugherty (1997)
Warehouse Management (IT1), Order Dowlatshahi (2000),
IT Management (IT2), Supply chain Van and Zijm (1999), Jing et.al.
Applications planning (IT3), Shipment and Tracking (2006),
(IT) (IT4) and Freight Payment (IT5) Scalle and Cotteleer (1999),
Khoo and Mitsuru (2006),
Holguin (2002) and
Jeffery and Ramanujam (2006)

Based on the above literature, this paper presents a structured model for evaluating the
third party reverse logistics selection using fuzzy extent analysis proposed by Chang (1996).

3. PROBLEM DESCRIPTION
The company chosen for this study is to build a partner who is a third party for its
reverse logistics network. Reverse logistics systems can be given to the third party reverse
logistics providers. An analysis should be made such that the third party provider should be
partnered or make alliance in reverse logistics systems to achieve optimal result and multiple
organizations might be involved in the reverse logistics function. The attributes and sub
attributes have to be most prevalent and important in the third party selection process.
Choosing the possible criteria for the third party selection involves a decision making process
which includes experts from various functional activities of the organization. The attributes
and sub attributes involved in the third party selection have been chosen by conducting a
survey. The selected attributes and sub attributes are given in Table 1. The objective is to
select a set of third parties, evaluate and rank them according to pre defined attributes. Fig. 2
is comprised of four levels for selecting the best third party Level 1 represents the goal i.e.,
Selection of best third party. Level 2 represents the seven attributes such as Third party
logistics services, Organizational Performance criteria, Organizational role, User satisfaction,
IT Application, Impact of use of 3PL (Third party Logistics) and Reverse logistics functions.
Level 3 represents 34 sub attributes and level 4 represents the number of third parties
(alternatives).

4. SOLUTION METHODOLOGY
In this work fuzzy extent analysis is adopted to solve the problem of selection of
Third party reverse logistics provider. The outline of the fuzzy extent analysis method
(Chang, 1996) can be summarized below.

Let X = { x1 , x2 ,K , xn } be an object set, and U = {u1 , u2 ,K , um } be a goal set. As per Chang

(1992, 1996) each object is taken and analysis for each goal, gi , is performed, respectively.

Therefore m extent analysis values for each object can be obtained, as under:
M 1gi , M g2i ,K, M gmi , i = 1,2,K, n ----------------- (1)

Where all the M gji ( j = 1, 2,K , m ) are TFNs whose parameters are, depicting least, most and

largest possible values respectively and represented as ( a, b, c ) .

The following steps depicted by Kahraman et al.,(2004) for Chang’s extent analysis:
Step 1. The value of fuzzy synthetic extent with respect to i th object is defined as
−1
m  n m 
Si = ∑ M gj ⊗  ∑∑ M gj  ----------------- (2)
i i
j =1  i =1 j =1 


m
To obtain j =1
M gji , perform the fuzzy addition operation of m extent analysis values for a
particular matrix such that
m  m m m 
∑ M gji =  ∑ a j , ∑ b j ,∑ c j  , ----------------- (3)
j =1  j =1 j =1 j =1 
−1
And to obtain  ∑ i =1 ∑ j =1 M gji 
n m
, perform the fuzzy addition operation of
 

M gji ( j = 1, 2,K , m ) values such that


n m
 n n n


i =1
∑ M gj
j =1
i
=  ∑ ai , ∑ bi ,∑ ci 
 i =1 i =1 i =1 
----------------- (4)

And then compute the inverse of the vector in the above equation such that
−1
 n m  1 
j  1 1
 ∑∑ M gi  = n , n , n  ----------------- (5)
 i =1 j =1   ∑ ci ∑ bi ∑ ai 
 i =1 i =1 i =1 
Step 2. The degree of possibility of M 2 = ( a2 , b2 , c2 ) ≥ M 1 = ( a1 , b1 , c1 ) is defined as

 (
V ( M 2 ≥ M 1 ) = sup  min µ M1 ( x ) , µ M 2 ( x ) 
 ) ----------------- (6)

And can be equivalently expressed as follows:


V ( M 2 ≥ M1 )

 1, if b2 ≥ b1
 ----------------- (7)
= hgt ( M 1 ∩ M 2 ) = µ M 2 ( d ) =  0, if a1 ≥ c2
 a1 − c2
 , otherwise
 ( b2 − c2 ) − ( b1 − a1 )

where d is the ordinate of the highest intersection point D between µ M1 and µ M 2 as shown

in Figure 3.

M2 M1
1

V ( M2 ≥ M1 )
D

0 a2 b2 a1 d c2 b1 c1

Figure 3: The intersection between M 1 and M 2

To compare M 1 and M 2 , both the values of V ( M 1 ≥ M 2 ) and V ( M 2 ≥ M 1 ) .

Step 3. The degree of possibility for a convex fuzzy number to be greater than k convex
fuzzy numbers M i ( i = 1, 2,K , k ) can be defined by
V ( M ≥ M 1 , M 2 ,K , M k ) = V ( M ≥ M 1 ) and ( M ≥ M 2 ) and K ( M ≥ M k ) 

= min V ( M ≥ M i ) , ( i = 1, 2, 3,K, k ) . ----------------- (8)

Assuming that
d ' ( Ai ) = min V ( Si ≥ Sk ) ----------------- (9)

For k = 1, 2,K , n; k ≠ i. Then the weight vector is given by

( )
T
W ' = d ' ( A1 ) , d ' ( A2 ) ,K, d ' ( An ) ----------------- (10)

Where Ai = ( i = 1, 2,K , n ) are n elements.

Step 4. By normalizing, the normalized weight vectors are

( )
T
W = d ( A1 ) , d ( A2 ) ,K, d ( An ) ----------------- (11)

where W is a non-fuzzy number.

5. APPLICATION OF THE MODEL AND RESULT ANALYSIS


An objective of this section is to illustrate how to choose the best 3PRPL’s using this
model and the model was applied to a battery company which is located in the southern part
of India.
The first step in the fuzzy extent analysis is creating a pair wise comparison matrix. In
order to perform a pairwise comparison among the attributes and sub-attributes, the linguistic
scale for the triangular numbers and fuzzy conversion scales given in Table 2 are used in the
proposed model.
Table 2. Triangular Fuzzy Conversion Scale (Modified from Percin, 2008)

Triangular fuzzy Triangular fuzzy


Linguistics scale for importance
scale reciprocal scale
Just equal (JE) (1,1,1) (1,1,1)
Equally important(EI) (1/2,1,3/2) (2/3,1,2)
Weakly important(WI) (1,3/2,2) (1/2,2/3,1)
Strongly more important(SMI) (3/2,2,5/2) (2/5,1/2,2/3)
Very strongly more
(2,5/2,3) (1/3,2/5,1/2)
important(VSMI)
Absolutely more important(AMI) (5/2,3,7/2) (2/7,1/3,2/5)
First the pair wise comparison matrix is constructed with the help of expert team and the
same is shown in table 3.

Table 3 . Fuzzy evaluation matrix

3PLS RLF OPC OR IT US IU3PL


3PLS (1,1,1) (5/2,3,7/2) (5/2,3,7/2) (2,5/2,3) (1/2,1,3/2) (1/2,1,3/2) (1/2,1,3/2)
RLF (2/7,1/3,2/5) (1,1,1) (1/2,1,3/2) (1,3/2,2) (1,3/2,2) (1,3/2,2) (1,3/2,2)
OPC (2/7,1/3,2/5) (2/3,1,2) (1,1,1) (1/2,1,3/2) (1,3/2,2) (2,5/2,3) (2,5/2,3)
OR (1/3,2/5,1/2) (1/2,2/3,1) (2/3,1,2) (1,1,1) (1,1,1) (1,3/2,2) (1,3/2,2)
IT (2/3,1,2) (1/2,2/3,1) (1/2,2/3,1) (1,1,1) (1,1,1) (1,3/2,2) (1,1,1)
US (2/3,1,2) (1/2,2/3,1) (1/3,2/5,1/2) (1/2,2/3,1) (1/2,2/3,1) (1,1,1) (1/2,1,3/2)
IU3PL (2/3,1,2) (1/2,2/3,1) (1/3,2/5,1/2) (1/2,2/3,1) (1,1,1) (2/3,1,2) (1,1,1)

By applying formula (2) given in section 4:


S3 PLS = (9.50, 12.50, 15.50) ⊗ (1/ 74.30,55.70, 42.57)
= (0.13,0.22,0.36)
S RLF = (5.79,8.33,10.90) ⊗ (1/ 74.30,55.70, 42.57)
= (0.08,0.15,0.26)
SOPC = (7.45,9.83,12.90) ⊗ (1/ 74.30,55.70, 42.57)
= (0.10,0.18,0.30)
SOR = (5.50,7.07,9.50) ⊗ (1/ 74.30,55.70, 42.57)
4:
= (0.07,0.13,0.22)
S IT = (5.67,6.83,9.00) ⊗ (1/ 74.30,55.70, 42.57)
= (0.08,0.12,0.21)
SUS = (4.00,5.40,8.00) ⊗ (1/ 74.30,55.70, 42.57)
= (0.05,0.10,0.19)
S IU 3 PL = (4.67,5.73,8.50) ⊗ (1/ 74.30,55.70, 42.57)
= (0.06,0.10,0.20)

With the help of equation 7, 9 and 10 the minimum degree of possibility of superiority of
each criterion over another is obtained. This further decides the weight vectors of the criteria.
Therefore, the weight vector is given as

W ' = (1,0.632,0.785,0.494,0.451,0.32,0.372)T
The normalized value of this vector decides the priority weights of each criterion over
another. The normalized weight vectors are calculated using the equation 11 and the same is
given below.
W = (0.24669,0.15593,0.1939,0.12202,0.11133,0.07909,0.09173)

Further the weights of sub-attributes and weights of alternatives with respect to each sub-
attribute are found using the similar procedure. The results are shown in the table 5 and table
6.
In this part the result obtained through fuzzy extent analysis (table 5 & 6) is compared with
solution obtained through AHP (table 4, Kannan, 2009). From table 6 it can be concluded that
the calculated importance level of attributes for the case is in the following order. 3PL
service, Organizational performance criteria, Reverse logistics functions, Organizational role,
IT Applications, Impact of use of 3pl and User Satisfaction. This result is compared with the
previous study done by Kannan (2009) using AHP and it shows that the top priority remains
the same with little changes in the other attributes priorities. Table 6 gives the local priority
vectors for the alternatives with respect to attributes and sub-attributes.

The total weighted score is shown in the table 6 for the each alternative (3PRLP1 to 3PRLP7)
and it was obtained by multiplying the local priority vectors of alternatives, priority vectors
of attributes and sub-attributes. Based on the global priority weight, the 3PRLP is selected
when it has the highest overall priority. From table 6 it can be seen that 3PRLP1 is preferred
which has the highest weight of [0.2176] among seven third parties. Third party 2 is at the
second choice [0.17779].

Table 4: Over all rating of Third Parties (AHP, Kannan (2008))


OVERALL RATING OF THIRD PARTIES IDENTIFIED BY THE COMPANY
GLOBAL WEIGHTS
SUB-
CRITERIA WEIGHT 3PRLP1 3PRLP2 3PRLP3 3PRLP4 3PRLP5 3PRLP6 3PRLP7
CRITERIA
3PLS1 0.31199 0.04688 0.02315 0.01399 0.0105 0.00846 0.00753 0.0095
THIRD PARTY 3PLS2 0.13732 0.02169 0.00945 0.00488 0.00522 0.00428 0.00372 0.00356
LOGISTICS 3PLS3 0.11118 0.01598 0.00869 0.00502 0.00348 0.00456 0.00287 0.00216
SERVICES 0.384676 3PLS4 0.12997 0.0201 0.01026 0.00547 0.00406 0.00398 0.00322 0.00291
3PLS5 0.30953 0.04787 0.02553 0.01385 0.00947 0.00873 0.00722 0.00641
RLF1 0.32836 0.0229 0.01167 0.00825 0.00682 0.0047 0.00372 0.00319
REVERSE RLF2 0.11374 0.00808 0.00432 0.00276 0.00186 0.00158 0.0013 0.00132
LOGISTICS RLF3 0.10528 0.00757 0.00353 0.00238 0.00196 0.00185 0.00111 0.00125
FUNCTION RLF4 0.06966 0.00518 0.00285 0.00186 0.00117 0.00074 0.00072 0.00058
0.186549 RLF5 0.19154 0.01333 0.0069 0.00542 0.00257 0.00316 0.00198 0.00237
RLF6 0.19143 0.01441 0.00727 0.00404 0.00326 0.00255 0.00208 0.0021
ORGANIZATIONAL OPC1 0.45094 0.02687 0.0132 0.00719 0.00698 0.00445 0.00483 0.00502
PERFORMANCE OPC2 0.18852 0.01119 0.00636 0.00389 0.00213 0.00203 0.00154 0.00151
CRITERIA OPC3 0.14968 0.00879 0.00398 0.00279 0.00247 0.00175 0.00167 0.00129
0.151992 OPC4 0.15693 0.00913 0.0055 0.00265 0.00243 0.01704 0.00148 0.00096
OPC5 0.05393 0.00327 0.00159 0.00097 0.00075 0.0006 0.00062 0.00038
OR1 0.32675 0.01398 0.00761 0.00448 0.00288 0.00396 0.00263 0.00201
ORGANIZATIONAL OR2 0.14632 0.00631 0.00354 0.00191 0.00141 0.00145 0.00115 0.00105
ROLE OR3 0.13503 0.00627 0.00333 0.00177 0.00126 0.00119 0.00099 0.00071
0.114938 OR4 0.08923 0.00419 0.00182 0.00116 0.0008 0.00081 0.00069 0.0008
OR5 0.30267 0.01283 0.00693 0.00405 0.00316 0.00327 0.00256 0.00198
IT1 0.33735 0.01095 0.00511 0.00354 0.0023 0.00207 0.00155 0.00169
IT2 0.13753 0.00409 0.00276 0.00117 0.00098 0.00076 0.00072 0.00061
IT APPLICATION
IT3 0.1127 0.00379 0.00187 0.00093 0.00082 0.0006 0.00059 0.00048
0.080647
IT4 0.14741 0.00472 0.00252 0.00166 0.00113 0.0008 0.00056 0.00049
IT5 0.26501 0.00861 0.00371 0.00274 0.00227 0.00166 0.00116 0.00122
US1 0.57226 0.00895 0.00527 0.00246 0.00236 0.00141 0.00113 0.00113
USER US2 0.15763 0.0025 0.00122 0.00072 0.0006 0.00045 0.00042 0.00035
SATISFACTION
US3 0.17687 0.00279 0.00141 0.00096 0.00049 0.00053 0.00045 0.0004
0.039672
US4 0.09324 0.00138 0.0008 0.00043 0.00031 0.00037 0.0002 0.00022
IU3PL1 0.56614 0.00893 0.0042 0.003 0.0023 0.00216 0.0017 0.00153
IMPACT OF USE OF IU3PL2 0.24252 0.00413 0.00195 0.00143 0.00097 0.00057 0.00051 0.00051
THIRD PARTY
IU3PL3 0.0903 0.00153 0.0008 0.00039 0.0003 0.00027 0.00023 0.00023
0.041527
IU3PL4 0.10104 0.0017 0.00085 0.00046 0.0004 0.00026 0.00025 0.00028
OVERALL PRIORITY 0.39089 0.19995 0.11867 0.08987 0.09305 0.0631 0.0602
RANK 1 2 3 5 4 6 7

Table 5: Local rating of Third Parties (Fuzzy Extent analysis)

OVERALL RATING OF THIRD PARTIES IDENTIFIED BY THE COMPANY


LOCAL WEIGHTS
SUB-
CRITERIA WEIGHT 3PRLP1 3PRLP2 3PRLP3 3PRLP4 3PRLP5 3PRLP6 3PRLP7
CRITERIA
3PLS1 0.18595 0.19367 0.15159 0.12698 0.10069 0.05179 0.16028 0.21500
THIRD PARTY 3PLS2 0.14605 0.20402 0.14329 0.10451 0.10960 0.06492 0.19458 0.17908
LOGISTICS 3PLS3 0.18741 0.18646 0.16558 0.12945 0.10064 0.08664 0.19131 0.13993
SERVICES
0.24669 3PLS4 0.26654 0.20188 0.16652 0.12103 0.09920 0.06431 0.18495 0.16212
3PLS5 0.21404 0.20902 0.18035 0.13108 0.09728 0.05515 0.17255 0.15457
RLF1 0.18979 0.29465 0.20273 0.16971 0.11391 0.03827 0.10712 0.07361
RLF2 0.18043 0.29606 0.22043 0.16608 0.09711 0.04336 0.09694 0.08001
REVERSE
LOGISTICS RLF3 0.18406 0.30903 0.20702 0.16422 0.10483 0.05243 0.08942 0.07305
FUNCTION RLF4 0.17435 0.30988 0.22856 0.18277 0.10003 0.03289 0.08807 0.05780
0.15593 RLF5 0.06731 0.29096 0.20996 0.19456 0.07986 0.05149 0.08776 0.08542
RLF6 0.20406 0.31735 0.22300 0.14604 0.10213 0.04198 0.09320 0.07631
ORGANIZATIONAL OPC1 0.24187 0.19946 0.14852 0.11510 0.11372 0.05855 0.20423 0.16041
PERFORMANCE OPC2 0.17976 0.20358 0.18913 0.15786 0.09369 0.05238 0.15601 0.14735
CRITERIA
0.19390 OPC3 0.21974 0.22440 0.17770 0.14740 0.07985 0.05595 0.15348 0.16122
OPC4 0.28966 0.20118 0.20218 0.13382 0.12234 0.05916 0.17103 0.11030
OPC5 0.06897 0.22090 0.17287 0.13938 0.09202 0.05594 0.18065 0.13824
OR1 0.26323 0.18798 0.15932 0.12973 0.09058 0.07387 0.20092 0.15760
OR2 0.20811 0.18425 0.16825 0.12218 0.09980 0.06768 0.18797 0.16987
ORGANIZATIONAL
ROLE OR3 0.25692 0.21915 0.18529 0.14303 0.10017 0.05982 0.16159 0.13095
0.12202 OR4 0.17581 0.21008 0.15756 0.13036 0.11718 0.06102 0.18138 0.14242
OR5 0.09593 0.18230 0.15608 0.12889 0.10534 0.06600 0.20753 0.15386
IT1 0.16784 0.18818 0.16290 0.12796 0.09160 0.06695 0.21730 0.14511
IT2 0.12206 0.18226 0.20273 0.11843 0.11179 0.05428 0.18089 0.14963
IT APPLICATION IT3 0.15780 0.18226 0.20273 0.11843 0.11179 0.05428 0.18089 0.14963
0.11133
IT4 0.24015 0.19713 0.18829 0.16723 0.11815 0.06991 0.14248 0.11680
IT5 0.31214 0.20652 0.14661 0.14690 0.12319 0.06595 0.14799 0.16284
US1 0.44670 0.22060 0.21352 0.13531 0.12482 0.05924 0.13600 0.11049
USER US2 0.20914 0.20092 0.15995 0.12771 0.10733 0.05749 0.19438 0.15222
SATISFACTION
US3 0.32975 0.20395 0.15425 0.16382 0.08875 0.05854 0.17959 0.15111
0.07909
US4 0.01441 0.19247 0.18834 0.14085 0.07150 0.08649 0.15405 0.16631
IU3PL1 0.33702 0.18015 0.14473 0.13498 0.11418 0.07158 0.18529 0.16908
IMPACT OF USE IU3PL2 0.26312 0.21163 0.16889 0.16349 0.11577 0.05270 0.14426 0.14326
OF THIRD PARTY
IU3PL3 0.16714 0.20900 0.18084 0.12427 0.09757 0.05274 0.16657 0.16902
0.09173
IU3PL4 0.23273 0.20338 0.16166 0.12347 0.11467 0.05336 0.16201 0.18145

Table 6: Overall Global rating of Third Parties (Fuzzy Extent analysis)

OVERALL RATING OF THIRD PARTIES IDENTIFIED BY THE COMPANY


GLOBAL WEIGHTS
SUB-
CRITERIA WEIGHT 3PRLP1 3PRLP2 3PRLP3 3PRLP4 3PRLP5 3PRLP6 3PRLP7
CRITERIA
3PLS1 0.18595 0.00888 0.00695 0.00583 0.00462 0.00238 0.00735 0.00986
3PLS2 0.14605 0.00735 0.00516 0.00377 0.00395 0.00234 0.00701 0.00645
THIRD PARTY
LOGISTICS 3PLS3 0.18741 0.00862 0.00766 0.00598 0.00465 0.00401 0.00884 0.00647
SERVICES 3PLS4 0.26654 0.01327 0.01095 0.00796 0.00652 0.00423 0.01216 0.01066
3PLS5 0.21404 0.01104 0.00952 0.00692 0.00514 0.00291 0.00911 0.00816
RLF1 0.18979 0.00872 0.00600 0.00502 0.00337 0.00113 0.00317 0.00218
RLF2 0.18043 0.00833 0.00620 0.00467 0.00273 0.00122 0.00273 0.00225
REVERSE RLF3 0.18406 0.00887 0.00594 0.00471 0.00301 0.00150 0.00257 0.00210
LOGISTICS
FUNCTION RLF4 0.17435 0.00842 0.00621 0.00497 0.00272 0.00089 0.00239 0.00157
RLF5 0.06731 0.00305 0.00220 0.00204 0.00084 0.00054 0.00092 0.00090
RLF6 0.20406 0.01010 0.00710 0.00465 0.00325 0.00134 0.00297 0.00243
OPC1 0.24187 0.00935 0.00697 0.00540 0.00533 0.00275 0.00958 0.00752
OPC2 0.17976 0.00710 0.00659 0.00550 0.00327 0.00183 0.00544 0.00514
ORGANIZATIONAL
PERFORMANCE OPC3 0.21974 0.00956 0.00757 0.00628 0.00340 0.00238 0.00654 0.00687
CRITERIA OPC4 0.28966 0.01130 0.01136 0.00752 0.00687 0.00332 0.00961 0.00619
OPC5 0.06897 0.00295 0.00231 0.00186 0.00123 0.00075 0.00242 0.00185
ORGANIZATIONAL OR1 0.26323 0.00604 0.00512 0.00417 0.00291 0.00237 0.00645 0.00506
ROLE OR2 0.20811 0.00468 0.00427 0.00310 0.00253 0.00172 0.00477 0.00431
OR3 0.25692 0.00687 0.00581 0.00448 0.00314 0.00188 0.00507 0.00411
OR4 0.17581 0.00451 0.00338 0.00280 0.00251 0.00131 0.00389 0.00306
OR5 0.09593 0.00213 0.00183 0.00151 0.00123 0.00077 0.00243 0.00180
IT1 0.16784 0.00352 0.00304 0.00239 0.00171 0.00125 0.00406 0.00271
IT2 0.12206 0.00248 0.00276 0.00161 0.00152 0.00074 0.00246 0.00203
IT APPLICATION IT3 0.15780 0.00320 0.00356 0.00208 0.00196 0.00095 0.00318 0.00263
IT4 0.24015 0.00527 0.00503 0.00447 0.00316 0.00187 0.00381 0.00312
IT5 0.31214 0.00718 0.00509 0.00510 0.00428 0.00229 0.00514 0.00566
US1 0.44670 0.00779 0.00754 0.00478 0.00441 0.00209 0.00480 0.00390
USER US2 0.20914 0.00332 0.00265 0.00211 0.00178 0.00095 0.00322 0.00252
SATISFACTION
US3 0.32975 0.00532 0.00402 0.00427 0.00231 0.00153 0.00468 0.00394
0.07159
US4 0.01441 0.00022 0.00021 0.00016 0.00008 0.00010 0.00018 0.00019
IU3PL1 0.33702 0.00557 0.00447 0.00417 0.00353 0.00221 0.00573 0.00523
IMPACT OF USE IU3PL2 0.26312 0.00511 0.00408 0.00395 0.00279 0.00127 0.00348 0.00346
OF THIRD PARTY IU3PL3 0.16714 0.00320 0.00277 0.00191 0.00150 0.00081 0.00255 0.00259
IU3PL4 0.23273 0.00434 0.00345 0.00264 0.00245 0.00114 0.00346 0.00387
OVERALL PRIORITY 0.21767 0.17779 0.13878 0.10472 0.05877 0.16216 0.14079
RANK 1 2 5 6 7 3 4

6. CONCLUSION
Reverse logistics service provider problem becomes more important for most
manufacturing companies in today’s complex environment. The selection process in the
reverse logistics service provider involves both types of attributes like quantitative and
qualitative attributes to select the best possible provider.

However, the top level management and managers are often uncertain about how to share the
key information to enhance the selection process. Fuzzy extent analysis approach seems to be
particularly effective in reducing the uncertainty in the determination of the relative weight
given to the different attribute and in finding the impact of each alternatives with respect to
the attributes and sub-attributes which are involved in the selction process.

This study utilizes a fuzzy extent analysis framework to select the best third party reverse
logistics provider for a battery manufacturing industry in India. While fuzzy AHP requires
weighty computations, it is a more systematic method than the others, and it is more capable
of capturing a human's appraisal of ambiguity when complex multi-attribute decision-making
problems are considered. This is true because pairwise comparisons provide a flexible and
realistic way to accommodate real-life data (Tolga, 2005).
For future research multi-criteria decision-making (MCDM) methods such as VIKOR,
TOPSIS and ELECTRE can be applied in a fuzzy environment for solving such a problem.

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LEVEL I
SELECTING THE BEST THIRD PARTY

IT
ORGANIZATIONAL 3PL LEVEL II
IMPACT APPLICATIONS
ROLE SERVICES
OF USE
OF 3PL

REVERSE USER ORGANIZATIONAL


LOGISTICS SATISFACTION PERFORMANCE
FUNCTIONS CRITERIA

OPC1
IU3PLI RLF1 OR1 US1 IT1
OPC2 3PLS1 LEVEL III
IU3PL2 RLF2 OR2 US2 IT2
OPC3 3PLS2
IU3PL3 RLF3 OR3 US3 IT3
OPC4 3PLS3
IU3PL4 RLF4 OR4 US4 IT4
3PLS4
IT5 OPC5
RLF5 OR5 3PLS5
RLF6

LEVEL IV
3PRLP 1 3PRLP 2 .......... 3PRLP n

Figure 2: Proposed Fuzzy extent analysis Model