Assurance Region Model Research Articles

ANALİTİK AĞ SÜRECİ VE VERİ ZARFLAMA ANALİZİ İLE İŞLETMELERİN ETKİNLİK ÖLÇÜMLERİ ÜZERİNE BİR UYGULAMA

In this study, the financial efficiency of enterprises registered in the BIST Food, Beverage and Tobacco index was measured using Data Envelopment Analysis and Analytical Network Process Methods. Within the scope of the analysis, 18 enterprises were considered as decision-making units, and efficiency measurements were made on 6 input and 3 output variables. CCR, BCC and Assurance Region models of Data Envelopment Analysis were used in the application phase. Analytical Network Process method was used to obtain the weight constraints required by the Assurance Region model. As a result of the application, it was observed that the lower and upper limits used in the Assurance Region model decreased the number of decision making units (DMU) that were evaluated and hence gave more realistic results by discriminating the efficient and inefficient DMUs.

Integrating quantitative and qualitative methodologies to build a national R&D plan using data envelopment analysis based on R&D stakeholders' perspectives.

The yearly increase in government R&D investment and top-down national R&D investment allocation requires a more quantitative decision-making system that maximizes R&D performance and efficient budget allocation. Sound decision-making is necessary at both the selection stage and the pursuit stage in order to maximize limited national R&D resources. We study Korean smart farms as an example to examine national R&D investment from the various R&D actors (academia, industry, and research institutes) perspectives. The objective of our research is to evaluate the theoretical efficiency of R&D investment on specific technologies in smart farms and compare the results with expert opinions where the reality is reflected. To be specific, our study is to provide the quantitative approach in making decision among policymakers by reflecting the field experiences and opinions. We use a data envelopment analysis with an assurance region model, which integrates an analytic hierarchy process and a data envelopment analysis. The weights of output in DEA model by the R&D actors are similar to the overall weight by all actors, implying that investment allocation decisions in the smart farm sector are not significantly affected by the R&D actors. We realized that the relative efficiency of some R&D technologies increases after reflecting qualitative ideas of experts. In reality, it is necessary to invest in these technology groups, but they excluded from top-down decision-making. This also shows that a government's top-down decision-making can distort its investment allocation. This study proposes a new approach to compensate for the difference between theoretical virtual prices and actual prices in data envelopment analysis. In particular, when comparing the only quantitative results on investment priorities with analysis results by additionally reflecting the opinions of experts in each sector, we found that the Korean government's investment priorities in the smart farm field are considerably distorted. Therefore, this study is expected to be used as an alternative for policy makers to compensate for the quantitative distortion might be caused by top-down national R&D investment decisions.

Evaluation and determinants of preschool effectiveness in Chile

Early intervention in quality education is a way to equalize opportunities, a premise assumed by several countries. As a result, interest has grown in preschool education, which is now an important area of public policy. However, the performance of preschool education centers has received relatively scarce research attention. Consistent with the above, the aim of this study is to examine the problem and evaluate the performance of preschool education centers that serve children from lower socioeconomic families in Chile. To this end, a centralized DEA Assurance Region model is proposed and compared with two other models. In addition, a second stage analysis is carried out using decision trees to identify variables that determine the composition of homogeneous preschool groups according to their effectiveness. The results show an average efficiency index of 70.54% with important heterogeneities between regions of the country, and significantly less than the 84.47% obtained through a traditional benefit-of-the-doubt model. The centralized (unique) weights obtained were 45% for learning, and 32% for user satisfaction and job satisfaction. A second stage analysis reveals the importance of three structural factors that mark the effectiveness of kindergartens: (i) size of the kindergarten; (ii) family income; and (iii) urban or rural location of the kindergarten. These results are relevant to public policy since they propose a valid and useful methodology for decision makers, quantify the levels of effectiveness, and emphasize the importance of focusing efforts on the centers that, due to their structural conditions, are more prone to lower levels of effectiveness. Similarly, they validate and align with the changes at this level of education in Chile in recent years.

Avoiding dissimilarity between the weights of the optimal DEA solutions

The zero weights in data envelopment analysis evaluation causes some problems such as ignoring the some inputs and/or outputs of DMUs under evaluation. Moreover, some authors claimed that the great differences in weights might be a problem. The aim of this paper is to extend the multiplier bound approach to avoid zero weights and great differences in the values of multipliers more. We show that our proposed model is equivalent to the type I assurance region model that will be used in the evaluation efficiency.

Productivity growth in network models: An application to banking during the financial crisis

We construct Malmquist Productivity indices for two-stage processes. A two-stage data envelopment analysis model with an additive efficiency decomposition is used for the modelling of the two-stage process. We incorporate prior information into the analysis using the Weight Assurance Region model. This model offers advantages such as the weights representing the contribution of each stage to the overall process are always positive and we also can restrict them into a region given the available prior information. We extend this model from efficiency analysis to productivity analysis and we calculate Malmquist Productivity indices using four alternative decomposition approaches. The model is applied to a panel of banks in Central and Eastern European countries and productivity change is evaluated for three periods of the financial crisis. The alternative decompositions allow us to examine the various sources of productivity change during the financial crisis. Convergence patterns are also examined.

Measuring Municipality Hospitals Efficiency in Hokkaido by using an Assurance Region Model

Measuring Municipality Hospitals Efficiency in Hokkaido by using an Assurance Region Model

Weight assurance region in two-stage additive efficiency decomposition DEA model: an application to school data

In this paper we use the additive efficiency decomposition approach in two-stage data envelopment analysis. Initially, we evaluate the variable returns to scale version and face a structural difficulty of the model. In an extreme case, weights ξ1 or ξ2, which represent the relative importance of the performance of the first and second stages, respectively, become zero for a number of decision making units (DMUs). As a result, individual stage efficiencies for these DMUs are undefined. We propose a weight assurance region model to restrict ξ1 and ξ2, which ensures that both weights are always positive, and therefore individual stage efficiency is always defined. Furthermore, the proposed model is appropriate for policy making in the presence of a priori information about the relative importance of each stage in the overall process. We employ the new model to evaluate the efficiency of secondary education in 65 countries and construct an overall ‘school efficiency’ index. In the first stage we measure the ‘learning environment efficiency’ and in the second we measure the ‘student’s performance efficiency’.

Evaluating construction contractors' efficiency in Hong Kong using Data Envelopment Analysis Assurance Region model

PurposeThe purpose of this paper is to investigate whether a few leading Hong Kong construction firms are also efficient contractors. Theoretically, market leaders can exploit the virtue of economy of scale, learning curve and cost leadership to consolidate their competitiveness. However, if market share is key success factor for firms to become and stay competitive, smaller contractors will be further marginalized if the construction market continues to shrink as Hong Kong's economy approaches maturity. Hence the research question is: Have a few leading contractors been taking advantage of their market size to be efficient in Hong Kong?Design/methodology/approachBased on the Data Envelopment Analysis Assurance Region (DEA_AR) model, the efficiency scores of 17 major Hong Kong contractors are compiled over the last ten years. DEA is a non‐parametric approach to examine the relative efficiency among different firms, in terms of output/input ratios. Unlike traditional I‐O analysis which relies on a static table of coefficients, DEA does not require any priori and usually subjective weights for inputs or outputs.FindingsThe results identify efficient contractors, among which the three leading ones (China State Construction, Shui On Construction and Yau Lee Holdings) have captured the majority of housing construction contract values. Nevertheless, only China State Construction has ranked consistently as most efficient over time. The efficiency scores of Shui On Construction have decreased successively from 2002 to 2009, and it has been the least efficient contractor from 2006 to 2009. Yau Lee Holdings has a V‐curve of efficiency scores.Originality/valueThis study represents the first attempt to adopt a DEA_AR model to evaluate construction contractors' efficiency, which reduces the number of zeroes and the variation in weights for estimation and enhances the adequacy for individual contractor's efficiency scores, compared to other types of DEA models such as the CCR model and the BCC model.

A Comparative Location Study for the Joint Development Station of a Mass Rapid Transit System: A Case in Taichung City in Taiwan

This paper is concerned with the selection of a candidate joint development station (JDS) for a Mass Rapid Transit (MRT) system. We propose a method to reach consensus for a group decision on the basis of a combination of the analytic hierarchy process and the assurance region model of data envelopment analysis. Several strategies for using this methodology—for example, Delphi procedures—are also discussed. On the basis of these analyses, the evaluators (council members) responsible for recommending the proper candidate JDS for an MRT system in Taichung City, Taiwan, came up with two contenders from among five: one station in Taichung's CBD area and the other in the Situn district. It was not possible to discriminate between the two using multiple criteria for evaluating stations. The evaluators recommended these two stations to the city council, who should now be able to make an informed, objective decision. In this report we have summarized, with emphasis on the methodological aspects, the decision-making processes that the evaluators followed.

Operating Efficiency of Life Insurance Companies: An Assurance Region Model

The present paper compares thirteen life insurance companies in respect of technical efficiency for the period 2002-2003 to 2005- 2006 using the assurance region approach. The assurance region approach was introduced by Thompson, Singleton, Thrall and Smith (1986) and was further developed by Thompson, Langemeier. Lee, Lee and Thrall (1990). This approach avoids the problem of slacks by imposing restrictions on the shadow prices of inputs and/or outputs. This leads to a reconstruction of the isoquant in a manner such that no slacks can exist at the radial projection of any input/output bundle onto the modified isoquant. Year to year comparison of mean technical efficiency scores reveal that mean technical efficiency has improved in 2003-2004 . relative to 2002-2003, remained on the same level in 2004-2005 and declined in 2005-2006. This is likely because of divergence in the performance across the life insurers. In the last two years, most of the life insurers have exhibited increasing returns to scale. This is indicative of the wide opportunities that the insurers have in store for them.

A comparative site evaluation study for relocating Japanese government agencies out of Tokyo

As a national project of Japan, plans for the relocation of several government agencies out of Tokyo have been ongoing. This paper is concerned with the problem of site selection for this project. The National Land Agency, the agency responsible for this project, has declared that the process of site selection should be rational, open to the public and easily understandable. In an effort to meet these requirements, we propose a consensus-making method for reaching a group decision, based on a combination of the analytic hierarchy process (AHP) and the Assurance Region model of data envelopment analysis (DEA). Several strategic uses of these methodologies, e.g., Delphi procedures, are also discussed. Based on these analyses, the “Wise Men” Committee for deciding the best site has chosen two from among ten contenders, one from the North-East and the other from the Central part of Japan, as candidates for the best relocation site. We could not discriminate between the two with respect to the multiple criteria chosen for evaluating sites. The Committee recommended the two sites to the Prime Minister at the end of December 1999. The Prime Minister reported this conclusion to the Diet. This topic is currently the focus of political discussions in the Diet. In this report, the authors summarize the decision-making processes that the Wise Men Committee followed, putting emphasis on the methodological aspects.

Mean utility in the assurance region model

This paper addresses the problem of ranking a finite set of alternatives through a linear utility with coefficients randomly distributed. In order to model relative importance of the different criteria, assurance regions on weights are used. A closed formula for the expected utility of each alternative is obtained under uniformity assumptions, and as a consequence, different ranking methods are proposed.