One of novel manners to achieve sustainable development is concentrating on circular economy in order to manage greenhouse gas emissions, energy consumption, and waste. It also helps to protect the environment and optimize usage of input resources. The main element of circular economy is closed-loop supply chain which covers both forward and reverse products flows. This study aims to outsource logistics operations in a closed-loop supply chain. An innovative analytical multi-step fuzzy decision-making method is proposed to rank sustainable third-party logistics service providers (3PLSPs). Fuzzy Decision-Making Trial and Evaluation Laboratory (DEMATEL) is first used to evaluate the relationships among the main criteria. Then, fuzzy analytic network process (ANP) is applied to weight the determined set of criteria. In order to develop the hybrid fuzzy DEMATEL-ANP method and to simplify the computation, the expert judgment method is used between the two techniques as a middle step to reduce the number of criteria. As many of the criteria overlap with each other on content and context, expert opinions are used to shortlist and rank the criteria. Finally, the 3PLSPs are ranked through the fuzzy complex proportional assessment (COPRAS) method. To validate the practicability and applicability of the improved decision-making model, a household appliance case study is applied with data obtained from industry experts. In this case, five service providers are considered and ranked, while the first one gets the best score. A sensitivity analysis is performed by altering the criteria weights to validate the proposed approach, data, and the obtained results. In terms business and the environment, this study provides success critical criteria for decision-making problems in circular economy for addressing sustainable development.
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© 2022 The Authors. Business Strategy and The Environment published by ERP Environment and John Wiley & Sons Ltd.