Understanding the performance measurement of Indian steel Industry: A DEA approach

Abstract

Efficiency measurement has been a major indicator of the performance of a firm. In the study the level of efficiency of the steel firms operating in India was ascertained by adopting an input oriented data envelopment analysis (DEA). Twenty steel producing firms for the period 2018–19 was considered for the study. The study was conducted by using the input variables such as raw material cost, power and fuel cost, gross fixed assets, current assets, and the output variables considered to measure the efficiency was sales turnover. The result of the study indicates the efficient and less efficient firms with respective to their technical efficiency scores. It also indicates the bench marking firms. Out of twenty firms, eleven firms were on the efficient frontier and rest nine were below the frontier. For the relatively less efficient firm the slack and target values were calculated and further analysis was done to indicate the area of improvement for the inputs, which will result in improving the efficiency of the firms.