A Hybrid Method to Measure the Operational Performance of Fast Food Chain Stores

Abstract

It is known that Data Envelopment Analysis (DEA) does not perform full ranking because DEA only classifies all of the efficient units as one in the Pareto sense. In this research, a hybrid approach, VFAD, that integrates the VlseKriterijumska Optimizacija I Kompromisno Resenje (VIKOR) methodology with Fuzzy Analytic Hierarchy Process (FAHP) and DEA is proposed to overcome this problem. Data collected from 50 fast food chain stores in Taipei City was used to verify the performance of the proposed VFAD approach. The result shows that the rank order of overall efficiency (OE) estimated by the DEA method alone and by VFAD approach are strongly and positively correlated. Moreover, the proposed VFAD method can fully rank the alternatives with multiple inputs and outputs. Thus, our empirical results conclude that some chain stores with equal efficiency in the Pareto sense can be more successfully ranked by our new ranking mechanism. Our proposed VFAD approach results in better performance in full ranking than the DEA method alone.