A grey-based decision-making approach for selecting a reverse logistics provider in a closed loop supply chain

Return of used products is gaining great worldwide attention due to resource depletion, environmental degradation, government legislation, and public awareness. Nowadays, reverse logistics is considered very important for organisations to improve their environmental and financial performance. Therefore, industries are turning to third‐party reverse logistics providers (3PRLPs) for reusing, recycling, and remanufacturing of their products. In this paper, a multi‐criteria decision making (MCDM) model is developed to guide the selection process of best 3PRLP. The proposed hybrid methodology is based on analytical hierarchy process (AHP) and grey relational analysis for 3PRLP selection and evaluation. This paper uses grey numbers for expressing ambiguity of the real world data and subjectivity of decision makers' assessments and presents a grey possibility degree for ranking 3PRLPs. To validate the capability of the proposed model a numerical example is presented in an automotive industry. Finally, managerial implications and future research directions conclude the paper.