Design of an enhanced logistics service provider selection model for e-commerce application

Abstract

With the increasing popularity of online shopping, customer's purchasing habits are gradually changing in that they often prefer to buy goods online instead of visiting a physical retail store. Hence, the business-to-customer (B2C) e-commerce concept has emerged to bring convenience and flexibility to customers. By shifting the traditional business model to e-commerce, the seller, e.g. supplier or retailer, not only concentrates on directly selling goods to customers online, but also needs to manage the whole business process, including product delivery to customers within a short period of time. To focus on the core business, the logistics function in the B2C market is usually outsourced to a logistics service provider (LSP). However, sellers who are new to the e-commerce market may find it difficult to select an appropriate LSP to fulfill their needs. In this paper, an enhanced logistics service provider selection (ELSPS) model is proposed for selecting an appropriate partner for providing delivery services under the e-commerce environment. A double fuzzy analytical hierarchy processing (FAHP) approach is applied for multi-criteria decision analysis in LSP selection and follow-up action prioritization. A pilot study is conducted, and the results provide a systematic approach and guidelines for new comers to enter into the e-commerce market.