Efficiency analysis of cement manufacturing facilities in Turkey considering undesirable outputs

Abstract

Data Envelopment Analysis (DEA) is a well-known tool used to assess the efficiency of homogenous units. In a DEA study, outputs are generally considered as the benefits gained and inputs are defined as the resources or the factors that may affect the performance of decision making units. However, if there is a necessity to deal with undesired factors, they are either defined as inputs or as undesired outputs in the DEA model. This study focuses on cement manufacturing facilities and aims to assess the effect of undesired outputs such as the amount of emissions that requires to be minimized and location of the facilities that needs to be maximized to avoid side effects of polluted air. This study considers eleven cement manufacturing facilities that are member of Cement Manufacturers’ Association of Turkey. DEA models are defined for common input and outputs available in the literature and for the proposed input, output, and undesired outputs. It is concluded that there is a significant difference in terms of consistency for the performances of cement manufacturing facilities when undesired factors are included and weights are assigned.