Sequential three-way decision on Euclidean distance-based EDAS (Evaluation based on Distance from Average Solution) method for last-mile logistics applications

As a popular approach to last-mile delivery, third-party logistics (3PL) has drawn much attention in managing supply chains. Due to the presence of multiple factors, 3PL service provider evaluation is a multi-criteria decision-making problem. This study introduces methodological enhancements to the EDAS (Evaluation based on Distance from the Average Solution) method to generate more intuitive insights into decision-making. First, instead of the L_1-metric, we introduced Euclidean-based EDAS (EDAS-E) to capture the underlying geometry of the space generated by a relatively high number of decision criteria in more comprehensive 3PL provider evaluations. Second, adopting the notion of “thinking in threes”, we developed an algorithm to implement a sequential three-way decision (3WD) that addresses ambiguity and provides more explainability in the evaluation process. An actual case study evaluating five 3PL service providers under 17 criteria demonstrates the efficacy of the proposed sequential 3WD-EDAS-E, aiding decision-makers to systematically distinguish between acceptable and unacceptable alternatives and those requiring further evaluation. The comparative analysis yields a high agreement between the results generated by the proposed approach and those of other multi-criteria methods. Finally, implications for the field of decision making and avenues for future research are detailed.