Evaluating efficiency and ranking of suppliers using non-radial super-efficiency data envelopment analysis with uncontrollable factors

Abstract

Supply chain management (SCM) has been received much attention from academics and corporates. Effective and sustainable SCM require proper efficiency evaluation of suppliers. Such evaluation can be performed using data envelopment analysis (DEA). Classical DEA models presume all inputs and outputs are under the control of suppliers’ management, as well as the models cannot provide a complete ranking of efficient and inefficient suppliers. However, in SCM and other real-managerial problems, some inputs and/or outputs may be uncontrollable (outside management control). Thus, this paper proposes a super efficiency of slacks-based measure (SE-SBM) approach that can handle uncontrollable factors. The proposed approach can distinguish between efficient and inefficient suppliers and identify their rankings. The discriminating power of the proposed approach is due to it concurrently deals with input excesses and output shortfalls to improve inefficient suppliers, as well as input savings and output surpluses of efficient suppliers to maintain their efficient status.