Research on 3PL capacity under logistics subcontracting

To meet uncertain customer demand in the upstream, 3PL will obtain external capacity during period of internal capacity shortage. As the market condition changes, price decision maker will change. Different price decision maker results in different subcontracting price and the optimal capacity of 3PL will change. In this paper, we investigate capacity and pricing decision problems of 3PL under Logistics subcontracting with demand uncertainty. We develop decision models in three types of different market conditions. We consider a single-stage decision-making model and the interest of LFP is considered as well as 3PL. Finally, numerical experiments are given. Analysis of the relationship between the optimal capacity and pricing and the cost of 3PL is given to indicate how the optimal decision change with parameters.