Abstract
The contradiction between the scarcity of common resources and the infinity of human demand for these resources has a significant impact on social development. Therefore, resource allocation can make the best use of limited resources in economic activities. Taking the two-stage supply chain where the outputs from the upstream supplier are taken as the inputs for the downstream manufacturer as an example, this paper applies the cross-efficiency model to comprehensively evaluate the efficiency scores of supply chains in the process of resource allocation and explores the relationship between the cross-efficiency of the supply chain and that of two enterprises within this supply chain. Furthermore, the self-interested behavior of enterprises is taken as the Pareto improvement principle to propose a Pareto-optimal two-stage cross-efficiency model, and this model can be used to optimally allocate the limited resources among two-stage supply chains. A common set of weights is determined to make all supply chains DEA efficient. Finally, the proposed model is illustrated to be feasible and effective through a practical application of 27 Iranian resin production companies.
Highlights
In the increasingly competitive market environment, the supply chain has gradually become the mainstream trend of enterprise development
Taking the basic two-stage supply chain as the research object, this paper introduces the advantages of the cross-evaluated method and the concept of Pareto-optimality into the Data envelopment analysis (DEA)-based method, and proposes the Pareto-optimal two-stage cross-efficiency model to achieve the resource allocation among two-stage supply chains by taking the self-interested motivation of decision making units (DMUs) who prefer to maximize their own interests as the Pareto improvement principle
This paper focuses on the allocation strategy of common resources among two-stage structure supply chains
Summary
In the increasingly competitive market environment, the supply chain has gradually become the mainstream trend of enterprise development. Yu et al [31] combined a two-stage network DEA model and the concept of cross-efficiency to solve the fixed cost allocation problem in the two-stage process, and the iterative method of [10] was applied to determine the optimal cross-efficiency scores for two stages and to obtain the optimal fixed cost allocation among all DMUs. Li et al [13] proposed a DEA game cross-efficiency approach to address the fixed cost allocation problem by explicitly considering both competition and cooperation relationships among DMUs, and the Shapley value was used to generate a unique and fair allocation scheme. Taking the basic two-stage supply chain as the research object, this paper introduces the advantages of the cross-evaluated method and the concept of Pareto-optimality into the DEA-based method, and proposes the Pareto-optimal two-stage cross-efficiency model to achieve the resource allocation among two-stage supply chains by taking the self-interested motivation of DMUs who prefer to maximize their own interests as the Pareto improvement principle.
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