Route-based data envelopment analysis models

Abstract

This paper proposes two novel route-based data envelopment analysis (DEA) models that jointly measure the route-level and company-level efficiencies amongst transport carriers. The core logics comprise a three-stage procedure that determines company efficiency, route efficiency and optimal allocation ratios for the common inputs. We prove that the ranking order of company performance determined by the route-based DEA model is identical to that determined by the company-based DEA model. An empirical case demonstrates the superiority of the proposed models in identifying the less efficient routs/companies as well as in reducing the input slacks without subjective conjectures.