Modelling fourth-party logistics transaction centre for evaluation and integration of trading partners using data envelopment analysis

  • Sharath Kumar

    Student thesis: Doctoral ThesisDoctor of Philosophy


    This thesis presents the modelling of an effective Fourth-Party Logistics (4PL) transaction centre which can evaluate trading partners and comprehensively integrate the improved competencies of trading partners for sustaining the post-merger effects. The proposed 4PL transaction centre is based on the best of breed concept to serve as a single point integrator. To create a best of breed 4PL set up, an exclusive performance measurement framework is proposed in a balanced approach by considering decision parameters from both the trading partners and the buying organisation perspectives. The novelty of the proposed 4PL performance measurement framework lies in its capability to integrate analytics with mathematical modelling resulting in a multi-stage framework which can be generalised to any industry. This thesis proposes the modelling of 4PL transaction centre through a computationally efficient Data Envelopment Analysis (DEA) approach considering time dynamics as an influential factor instead of conventional static evaluation. The versatile features of dynamic DEA approach are realised through the variable lag effects (positive, neutral or negative) on subsequent chain partners to emulate actual scenario by eliminating bias in the evaluation process.

    Based on the derived outputs from the developed framework, this thesis enables to deal with a range of cross-segment mergers by extending the conventional Bogetoft and Wang’s production economics integration model which is otherwise limited to mergers of similarsegment only. This thesis proposes a novel two-tier cross-segment integration framework for the 4PL transaction centre prioritising performance orientation in the first tier and cost orientation in the second tier to quantify the merger gain. The integration framework developed in this thesis facilitates the coordinator of transaction centre to manage and control 4PL activities. In summary, this thesis demonstrates an objective approach to quantify the 4PL value addition in a unified approach (evaluation and integration) with improved consistency and adequacy. The advantageous and desirable features attained by modelling the 4PL transaction centre are addressed specifically from operational perspective instead of available financial measures. This thesis also presents extensions to the proposed transaction centre to deal with multi-criteria decisions objectively along with risk considerations. The expected value additions from the proposed 4PL transaction centre are substantiated through a case study utilising real data of suppliers and logistics service providers from a tiller and tractor manufacturing company.
    Date of Award2015
    Original languageEnglish
    Awarding Institution
    • Coventry University
    • M S Ramaiah University of Applied Sciences
    SupervisorHunsur K. Narahari (Supervisor) & Nick Wright (Supervisor)


    • Business logistics
    • Data envelopment analysis

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