A logistics provider evaluation and selection methodology based on AHP and linear programming integration.

In the AHP procedure, experts are asked to provide a numerical quantification in pair-wise comparisons; when dealing with several criteria, inconsistency may rise and Saaty’s Consistency Ratio threshold helps in identifying those matrices to be rejected or those interviews to be repeated. However, in certain domains, a faster way to proceed in the determination of the criteria weight is appreciated, along with the opportunity of merging the experts’ indications with objective judgments originating from historical data analysis. This is the case of several industrial firms which have to perform a supplier selection. In this paper, we propose an evaluation method that combines AHP, DEA and Linear Programming in order to support multi-criterion decisions of Third Party Logistics providers: a rewarding/penalizing effect, depending on the suppliers past performance, is used to correct the errors resulting from biased quantification of weights in AHP. The proposed model has been validated on the real case of an international Logistics Service Provider.