Selection of a sustainable third-party reverse logistics provider based on the robustness analysis of an outranking graph kernel conducted with ELECTRE I and SMAA

Pressure from legislation and customers has motivated companies to consider reverse logistics (RL) in their operations. Since it is a complex procedure that requires an adequate system, the recent trend consists in outsourcing RL to third-party reverse logistics providers (3PRLPs). This paper provides the background of sustainable triple bottom line theory with focus on economic, environmental, and social aspects under 3PRL concerns. The relevant sustainability criteria are used in a case study conducted in cooperation with an Indian automotive remanufacturing company. To select the most preferred service provider, we use a hybrid method combining a variant of ELECTRE I accounting for the effect of reinforced preference, the revised Simos procedure, and Stochastic Multi-criteria Acceptability Analysis. The incorporated approach exploits all parameters of an outranking model compatible with the incomplete preference information of the Decision Maker. In particular, it derives the newly defined kernel acceptability and membership indices that can be interpreted as a support given to the selection of either a particular subset of alternatives or a single option. The proposed ELECTRE-based method enriches the spectrum of multiple criteria decision analysis approaches that can be used to effectively approach the problem of the 3PRLP selection. As indicated by the extensive review presented in the paper, this application field was so far dominated by Analytic Hierarchy Process and TOPSIS, whose weaknesses can be overcome by applying the outranking methods.