An integrated approach for the merger of small and medium-sized industrial units

Abstract

Considering the importance of small and medium-sized industrial units for economic growth, social cohesion, regional and local development, this study presents a model for the merger so that they can make use of each other’s capacities and facilities to achieve higher efficiency levels. The involved criteria have been chosen using the SCOR model with the consideration of sustainability, resilience and agility criteria in each part of the supply chain network. PCA has been used to reduce the dimensionality and the efficiency of units has been determined by network DEA. Next, a mathematical model has been used to determine the best combination for merger. The model chosen for the finalization of the merger process is inverse network DEA, which tries to determine the final inputs of the merged units for a specific target. In addition to theoretical benefits, the results have practical applications. The results can give supply chain partners a common language for better communication and help them settle on standardized definitions. The model has been implemented using real-world data gathered from other articles, which pertain to 26 stone industries of Iran. The DEA model and the mathematical model have been solved through GAMS and the PCA approach through MATLAB.