Implementation Of Data Envelopment Analysis Research Articles

Implementation of Data Envelopment Analysis (DEA) on Measuring the Efficiency of Gas Station Services

Along with the increasing number of transportation vehicles in Indonesia, the growth of the gas station business is also increasing from year to year. This requires companies in the oil and gas industry to improve their performance, and gas stations must have the right strategy to improve efficiency. Measurement of efficiency and productivity is one of the first steps that must be taken by a gas station operation to improve performance. This research analyzes the performance differences in each gas station with the Data Envelopment Analysis (DEA) approach, where DEA is a linear programming model based on measuring the relative efficiency of a unit using many inputs and many outputs. This study aims to identify input and output factors that affect the efficiency level of gas stations, determine the work efficiency of each gas station in carrying out the service process to consumers, and determine the improvement planning strategy for inefficient gas stations

What Can Support Cross-Border Cooperation in the Blue Economy? Lessons from Blue Sector Performance Analysis in Estonia and Finland

Cross-border cooperation creates possibilities for improving the economic performance of the economies of different countries and allows for the efficient use of resources by considering sector-specific conditions for cooperation. The objective of this paper is to provide a methodological framework for analysing the economic performance of selected blue sectors, suggesting additional information for the development of cross-border cooperation in two neighbouring countries: Estonia and Finland. The analysis of the economic performance of the selected blue sectors relies on the Amadeus database for both countries, the implementation of Data Envelopment Analysis (DEA), and the calculation of partial productivity measures. The results of the study show that, on average, blue sectors report good performance indicators in coastal regions, but there are also some signs of imperfect efficiency. The common pattern of imperfectly efficient blue sectors in both countries is due to an excess of some fixed assets, which convey extra costs for business activities and, to some extent, generate excessive environmental pressures. The special nature of a shared blue economic area between Estonia and Finland stipulates close cross-border cooperation as an important tool to improve the performance of the imperfectly efficient sectors through shared “best practice” operations, technologies, and infrastructures. However, the lack of appropriate cross-border statistical data restricts analytical opportunities and the development of policy recommendations.

Measuring technical efficiency of dry bulk terminal performance using the frontier application of data envelopment analysis: A proposed framework

The usage of performance indicators in measuring seaport efficiency is undeniable especially towards increasing the port performance. There are numerous studies on applying data envelopment analysis (DEA) which demonstrates the relationship between technical efficiency and port performance. Conversely, there has been a significant problem of port inefficiency in terms of port performance. DEA application is being applied between the technical efficiency and port performance. It is important for indicators to be initiated on port efficiency which may lead to the increase of the port performance. However, the challenges to be implemented in the port as a whole will be difficult due to broad technical factors from various port activities. Implementation of DEA has been done commonly in container operations but not in dry bulk terminal area. Therefore, this conceptual paper discussed the potential of using the technical port indicators and DEA application specifically in dry bulk terminal.

Implementation of Data Envelopment analysis (DEA) in measuring the efficiency zakat fund management

This study aims to determine the efficiency level of management of zakat funds at the National Zakat Amil Agency (BAZNAS). The author uses the quantitative non-parametric Data Envelopment Analysis (DEA) method. Total assets, promotion, and documentation costs, and official travel costs as input variables. Whereas the output variance consists of receiving zakat funds and distributing zakat funds. The results showed that BAZNAS experienced efficiency in 2012-2014 and 2017 with a score of 100%. Inefficiencies occurred in 2015 at 79.16% and in 2016 amounted to 98.72%. In 2015-2016, all input variables experienced inefficiency, while the output variable was the only inefficient distribution of zakat funds. In overcoming, inefficiencies can be adjusted between the target and actual quantities specified in the DEA calculation. The author recommends that BAZNAS pay attention to the causes of inefficiency so that it can improve performance better.

Efficiency of Vegetables Produced in Glasshouses: The Impact of Data Envelopment Analysis (DEA) in Land Management Decision Making

Glasshouse farming is one of the most intensive types of production of agricultural products. Via this process, consumers have the ability to consume mainly off-season vegetables and farmers are able to reduce operational risks, due to their ability to control micro-climate conditions. This type of farming is quite competitive worldwide, this being the main reason for formulating and implementing assessment models measuring operational performance. The methodology used in this study is Data Envelopment Analysis (DEA), which has wide acceptance in agriculture, among other sectors of the economy. The production protocols of four different vegetables—cucumber, eggplant, pepper, and tomato—were evaluated. Acreage (m2), crop protection costs (€), fertilizers (€), labor (Hr/year), energy (€), and other costs (€) were used as inputs. The turnover of every production unit (€) was used as the output. Ninety-eight agricultural holdings participated in this survey. The dataset was obtained by face-to-face interviews. The main findings verify the existence of significant relative deficiencies (including a mean efficiency score of 0.87) as regards inputs usage, as well as considerably different efficiency scores among the different cultivations. The most efficient of these was the eggplant production protocol and the least efficient was that used for the tomato. The implementation of DEA verified its utility, providing incentives for continuing to use this methodology for improving land management decision making.

Efficiency and Persistence of Spanish Absolute Return Funds

Performance measurement is an area of crucial interest in asset valuation and investment management. High volatility as well as time aggregation of returns, amongst other characteristics, may distort the results of conventional measures of performance. In this work, we study the performance of 115 Spanish Absolute Return Funds in the period 2010-2015, using the Sharpe, Treynor, Jensen and Modified Sharpe ratios. We then apply Data Envelopment Analysis to classify the funds in order to avoid the problems arising from the non-normality of their returns, since non-gaussian returns do not pose a problem in Data Envelopment Analysis implementation. In addition, we apply the Malkiel, Brown and Goetzman test and the Rude and Khan test in annual periods to determine the existence of persistence. Finally, we study the relationship between efficiency and persistence in order to determine the relationship between both measures and to support decision-making processes. The results show a significant relationship between cross efficiency and Modified Sharpe ratios as well as the existence of persistence for annual periods. Nevertheless, the results do not allow concluding any relationship amongst efficiency and persistence.

A Nonparametric Economic Analysis of the US Natural Gas Transmission Infrastructure: Efficiency, Trade-Offs and Emerging Industry Configurations

This paper presents a study aimed at measuring the efficiency of the transmission segment of the US natural gas industry from an economic perspective. The gas transmission infrastructure is modeled as an economic production function and a multi-stage modeling approach based on the implementation of Data Envelopment Analysis is employed to obtain an efficiency measure in a two-dimension performance space, i.e., cost and revenue-efficiency. This approach allows taking into account conflicting business goals. The study also performs cluster analysis to uncover homogeneous efficiency profiles relative to the gas transmission systems to explore determinants of efficiency rates, and trade-off situations. A sample containing 80 US gas transmission systems is used in the analysis. Results indicate that the transmission segment of the US gas industry has considerable inefficiencies, while average cost and revenue-efficiency scores are 0.324 and 0.301, and only three transmission systems achieve high scores on both efficiency dimensions. Cluster analysis identified seven configurations. In three of them there are no trade-off situations between cost and revenue efficiencies. However, only in one of them gas transmission systems have high efficiencies. The remaining four configurations exhibit trade-off situations having different intensity. Such trade-offs can be determined by the gas transmission infrastructure size.

Using a network data envelopment analysis model to assess the efficiency and effectiveness of cultural tourism promotion in Taiwan

ABSTRACTThe importance of tourism promotion has been discussed throughout past studies, and the consequences of ineffective promotion have also been investigated. While tourism promotion is a topic of interest to many researchers, performance measurement used to assess the effectiveness of tourism promotion is a topic seldom discussed. The purpose of this study is to develop an approach based on the data envelopment analysis (DEA) model to evaluate performance for tourism promotion. The main difference compared with previous DEA models is the evaluation of multiple efficiencies in a single DEA implementation, and the assessment of overall efficiency in a ratio index. In the assumption of variables, we use cultural tourism promotion as a foundation in formulating the empirical evaluation, and we test the proposed model by using data across 20 regions in Taiwan.

Screening of socio-economic indicators for sustainability assessment: a combined life cycle assessment and data envelopment analysis approach

The combination of life cycle assessment (LCA) and data envelopment analysis (DEA) has recently been proposed to integrate operational, environmental and, to a lesser extent, socio-economic aspects when evaluating multiple similar entities known as decision-making units (DMUs). While labour has already been proven to be an appropriate parameter for implementation in LCA + DEA studies, this article aims to increase the current range of socio-economic indicators suitable for their integration into this novel framework. A sustainability-oriented LCA + DEA method is presented in this article. Furthermore, according to the singular features of the methodological approach, a set of four criteria is defined in order to test the suitability of 40 relevant socio-economic indicators for LCA + DEA implementation. These criteria include quantifiability, DMU specificity, data availability and data quality. Based on the degree of fulfilment of these criteria, the implementability of the indicators is classified as straightforward, likely, unlikely or excluded. According to the proposed criteria, 12 out of 40 socio-economic indicators are found to be suitable, i.e. their implementability in the LCA + DEA framework is considered either straightforward or likely. The difficulty in finding suitable LCA + DEA indicators is found to increase when considering stakeholders with a scope beyond the DMU level. Concerns about the suitability of socio-economic indicators for LCA + DEA as well as potentials and limitations of the approach as a sustainability assessment methodology are discussed. A significant improvement in the socio-economic dimension of LCA + DEA studies for sustainability assessment is achieved. The method proposed is concluded to be a feasible approach for the sustainability assessment of multiple entities, but still with further potentials to be explored.

A DEA-TOPSIS approach for ranking credit institutions

Article history: Received January 20, 2014 Accepted 5 July 2014 Available online August 11 2014 Measuring the relative efficiency of financial units plays essential role for making strategic decisions such as business development, downsizing, etc. This paper presents an empirical investigation to rank different branches of a credit institution named Samen in city of Semnan, Iran. The proposed study uses data envelopment analysis (DEA) for measuring the relative efficiency of 17 units. The results indicate that five units were efficient and using Technique for Order of Preference by Similarity to Ideal Solution (TOPSIS), the efficient units are ranked based on some inputs/outputs. The results of this study indicate that most branches of this financial unit performed poorly and a restructure in their businesses is necessary. In addition, the study has provided some evidences that considering employee wage, bank deposit and administration expenses as inputs for DEA implementation seems to provide better results than using total assets and equities. © 2014 Growing Science Ltd. All rights reserved.

A neuro-data envelopment analysis approach for optimization of uncorrelated multiple response problems with smaller the better type controllable factors

In this paper, a new method is proposed to optimize a multi-response optimization problem based on the Taguchi method for the processes where controllable factors are the smaller-the-better (STB)-type variables and the analyzer desires to find an optimal solution with smaller amount of controllable factors. In such processes, the overall output quality of the product should be maximized while the usage of the process inputs, the controllable factors, should be minimized. Since all possible combinations of factors’ levels, are not considered in the Taguchi method, the response values of the possible unpracticed treatments are estimated using the artificial neural network (ANN). The neural network is tuned by the central composite design (CCD) and the genetic algorithm (GA). Then data envelopment analysis (DEA) is applied for determining the efficiency of each treatment. Although the important issue for implementation of DEA is its philosophy, which is maximization of outputs versus minimization of inputs, this important issue has been neglected in previous similar studies in multi-response problems. Finally, the most efficient treatment is determined using the maximin weight model approach. The performance of the proposed method is verified in a plastic molding process. Moreover a sensitivity analysis has been done by an efficiency estimator neural network. The results show efficiency of the proposed approach.

Measuring relative performance of banking industry using a DEA and TOPSIS

Article history: Received September 28, 2012 Received in revised format 21 December 2012 Accepted 23 December 2012 Available online December 25 2012 One of the primary concerns in banking industry is to measure the relative importance of banking industry using popular multi criteria decision making (MCDM) techniques such as data envelopment analysis (DEA) and Technique for Order Preference by Similarity to Ideal Solution (TOPSIS). In this paper, we use these two MCDM techniques to measure the relative efficiencies of 16 private and governmental banks in terms of electronic payment. There are three inputs with DEA methods including the number of issued cards, the number of ATM machines and the number of POSs and there are two outputs including the number of successful ATMs and the number of successful POSs transactions. The proposed study of this paper uses the necessary data of one of Iranian provinces and the results of the implementation of DEA and TOPSIS have indicated that 9 out of 16 banks were efficient. Our study also indicates that mean of relative efficiency for private banks was 82% while this number was 75% for governmental banks. © 2013 Growing Science Ltd. All rights reserved.

Measuring the relative efficiency of Ilam hospitals using data envelopment analysis

Article history: Received October 1, 2011 Received in Revised form November, 14, 2011 Accepted 15 February 2012 Available online 4 March 2012 Measuring the relative efficiency is one of the most important issues among hospitals in today's economy. These days, we hear that cost reduction is a necessity for survival of business owners and one primary to reduce the expenditures is to increase relative efficiency. The proposed study of this paper first uses output oriented data envelopment analysis (DEA) to measure the relative efficiencies of nine hospitals. The proposed model uses four types of employee namely specialists, physicians, technicians and other staffs as input parameters. The model also uses the number of surgeries, hospitalized and radiography as the outputs of the proposed model. Since the implementation of DEA leads us to have more than one single efficient unit, we implement supper efficiency technique to measure the relative efficiency of efficient units. © 2012 Growing Science Ltd. All rights reserved.

Assessing technical efficiency of Chios sheep farms with data envelopment analysis

In this study the level of technical efficiency of 58 Chios sheep farms is estimated with the implementation of Data Envelopment Analysis. This level of technical efficiency is used as a classification criterion and the main technical and economic indices of the farms are analyzed in order to investigate their contribution to the improvement of technical efficiency. Next, the structural and economic characteristics of the farms that utilize the existing technology efficiently are described and compared with the average farm. The results show the presence of substantial inefficiencies in the allocation of the existing resources among farms that rear Chios sheep in Greece, which indicates that there is considerable room for development. The estimated mean level of technical efficiency is 0.76, suggesting that the average farm could increase its value of production by 24%, given the level of inputs and the existing production technology. Furthermore, larger farms are associated with higher levels of efficiency. A technical and economic description indicates that the efficient farms, compared to the average Chios breed farm, use less land and labor, rear a smaller number of ewes, utilize less variable and fixed capital and achieve a higher income in order to produce the same level of output.

Investment efficiency in the Italian water service industry: a benchmarking study using data envelopment analysis (DEA)

The paper presents a benchmarking study of the Italian water service industry using data envelopment analysis. Sample investigated in the study includes 38 optimal territorial areas (ATOs), where the ATO is a well circumscribed geographical area where the provision of integrated water services is considered efficient. Results of DEA implementation show that the average pure technical and scale efficiency are situated at 92.62% and 93.91%, respectively, while the average technical efficiencies score is 87.61%. Findings also support the idea that there might be an optimal size of ATOs which is associated to higher efficiency scores and that agglomeration economies are important in the provision of water integrated services. Large scale operations and ATO size are associated to lower efficiency rates.

Integrating DEA into Six Sigma methodology for measuring health service efficiency

As a linear programming technique that is used to assess performance efficiency among organizational units, data envelopment analysis (DEA) has the practical value for planners to identify the most efficient units and thus project a best possible course of actions. This is also the fundamental goal of Six Sigma methodology for process improvement. Therefore, it is natural to integrate the DEA method into the framework of Six Sigma to enhance both the usefulness of Six Sigma and the effectiveness of DEA for assessing and improving health service efficiency. In this paper, the implementation of DEA is well incorporated into the Define, Measure, Analyze, Improve and Control process. The procedure can be well fitted into the Blackbelts training curriculum, which can also serve as a roadmap for Six Sigma practitioners to implement the DEA-enhanced projects. To illustrate how to integrate DEA into the Six Sigma framework, we present a Six Sigma project implemented to measure physician productivity in a clinical department.

Multidimensional Risk/Performance Measurement for Hedge Funds

Part A of the study uses Data Envelopment Analysis (DEA) from the field of Operations Research to analyze the performance of hedge funds. The analysis can be extended to other investment portfolios since the implementation of DEA does not require that your data be normally distributed like other conventional performance measures.Part B uses a multiple linear regression model of the form similar to a multi-factor Capital Asset Pricing Model to explain hedge fund exposures to various capital markets (if any). This method however assumes that the data is normally distributed. The results are only used as a guide in explaining hedge fund exposures and not for exact predictive purposes.

Large-scale data envelopment analysis (DEA) implementation: a strategic performance management approach

We present one of the first large-scale implementations of data envelopment analysis (DEA) at the heart of a permanent performance management system in its third year of operation. The system evaluates more than 1000 field unit operations devoted to disaster relief, emergency communications, and life-saving skills training. The following research objectives were accomplished: (a) advanced a conceptual model for measuring performance in the nonprofit sector; (b) adapted a DEA formulation to account for differences in the operational environment of the field units, and included service quality, and effectiveness measures alongside traditional efficiency measures; and (c) created from scratch data collection (service quality and outcome achievement survey instruments) and report generation tools necessary for the deployment of evaluation results to the field in an user-friendly format for managers. While the suitability of DEA for real-life performance measurement is demonstrated, challenges of a DEA implementation are also discussed.

A Multi-Criteria Approach to Destination Benchmarking

SUMMARY This paper introduces Data Envelopment Analysis (DEA) for the evaluation of inefficiencies in tourism advertising programs and the identification of optimal comparison partners for benchmarking. The implementation of DEA for benchmarking tourism destinations is demonstrated by assessing state tourism advertising programs in the United States. This evaluation includes information on the advertising budgets of state tourism offices, the allocation of market effort in international and domestic segments, and the number of visitors and expenditures generated in the various destinations. A proximity measure was used as an exogenously fixed input variable in order to reflect differences in domestic market size. Findings include efficiency scores for state tourism offices offering several possibilities for managerial implications. Furthermore, the concept of a virtual reference destination assisting managers to analyze their individual strength and weaknessesis introduced. Finally, a discussion of the potential and limitations of DEA for benchmarking of tourism destinations is provided.