Efficiency assessment of Indian electronics retail stores using DEA

Abstract

Retail plays an important role in creating a link between upstream stages of a supply chain and the end customers. Supply chains can create higher customer value and competitive advantage if retailers are capable of extending their capabilities and performance. It is imperative for retail businesses to monitor their performance based on appropriate performance measures and devise strategies for continuous improvements. This study presents the methodology for selection of performance assessment measures integrating fuzzy Delphi and data envelopment analysis (DEA) selective measure methods; and then compute the relative efficiency of multiple stores of an Indian Electronics retail chain following the DEA method. The overall performance of a retail chain rest on the individual store's performance and hence it is all the more important for the inefficient stores to benchmark the performance of the efficient stores. Subsequent to efficiency measurement, super efficiency scores are computed to rank the efficient stores and input/output slack are determined for inefficient stores to help practitioners in planning strategies for benchmarking and performance enhancement.