Cost, revenue and profit efficiency in supply chain

Abstract

A supply chain is a set of suppliers, manufactures and distributors, which are linked together. The first chain is a supplier and the last one is customers. What is the most important in supply chain are high- quality products by the least cost and the most benefit. In this regard, each input and output and intermediate have unit price and unit cost information. The cost-minimization and the profit-maximization are a great importance for an effective management of supply chain. Data Envelopment Analysis (DEA) can be used to evaluate the variant types of efficiency such as technical efficiency, cost efficiency, revenue efficiency and profit efficiency. In this paper, we are going to evaluate cost, revenue and profit efficiency in a three-stage supply chain and a multi-Stage Supply chain. These models are illustrated by a numerical example. Finally, we compare the results of constant returns to scale (CRS) and variable returns to scale (VRS). Key words: Data Envelopment Analysis (DEA), supply chain management (SCM), cost efficiency, revenue efficiency, profit efficiency.