DEA Technique Research Articles

Development of fuzzy two-stage DEA model for competitive advantage based on RBV and strategic agility as a dynamic capability

Purpose – This paper aims to develop a framework for competitive advantage by systematic quantitative methodology based on resource-based view and dynamic capability theory. Strategic agility was used as a dynamic capability. Design/methodology/approach – Data were collected from a survey aimed at manufacturing companies from five manufacturing industry in Semnan, Iran. A total of 102 questionnaires were received from 13 companies using convenience sampling. Fuzzy two-stage data envelopment analysis model (DEA) was used to analyse the data collected. Findings – The results indicate that there is close internal relationship among firm resources, strategic agility and competitive advantage, and their inherent relationship makes constant returns to scale (CRS) scores closer to 1. In most of the companies, the second process which transforms strategic agility to competitive advantage is the main cause for unsatisfactory performance in gaining competitive advantage. Originality/value – The innovation of this paper is in its model and method. There is no research has been ever done on the relationship among firm resources, strategic agility and competitive advantage. Moreover, to obtain a competitive advantage structure, DEA technique was adopted which is a new approach in this area.

CO2 emissions and energy intensity reduction allocation over provincial industrial sectors in China

High energy consumption by the industry of developing countries has led to the problems of increasing emission of greenhouse gases (GHG) (primarily CO2) and worsening energy shortages. To address these problems, many mitigation measures have been utilized. One major measure is to mandate fixed reductions of GHG emission and energy consumption. Therefore, it is important for each developing country to disaggregate their national reduction targets into targets for various geographical parts of the country. In this paper, we propose a DEA-based approach to allocate China’s national CO2 emissions and energy intensity reduction targets over Chinese provincial industrial sectors. We firstly evaluate the energy and environmental efficiency of Chinese industry considering energy consumption and GHG emissions. Then, considering the necessity of mitigating GHG emission and energy consumption, we develop a context-dependent DEA technique which can better characterize the changeable production with reductions of CO2 emission and energy intensity, to help allocate the national reduction targets over provincial industrial sectors. Our empirical study of 30 Chinese regions for the period 2005–2010 shows that the industry of China had poor energy and environmental efficiency. Considering three major geographical areas, eastern China’s industrial sector had the highest efficiency scores while in this aspect central and western China were similar to each other at a lower level. Our study shows that the most effective allocation of the national reduction target requires most of the 30 regional industrial to reduce CO2 emission and energy intensity, while a few can increase or maintain their 2010 levels.

Dynamics of Tenancy Inefficiency in Rural Punjab

The study incorporates size-class differences among owner and tenant cultivators to understand their implication on resource use efficiency using the non-parametric DEA technique. The empirical exercise is based on the farm management survey data pertaining to Punjab. The study reveals that both the owner and tenant cultivators are able to capture the fruits of new technology that has occurred in a period of ten years. However, the benefits are mostly captured by the medium and semi medium size farms. The finding also supports with the basic neoclassical logic of inherent inefficiency of tenant farm as propounded by Marshall (1920).

동북아시아 주요 컨테이너항만의 효율성 비교연구

본 연구의 목적은 동북아시아 주요 컨테이너항만간의 상대적 효율성을 분석함으로써, 각 항만의 현재 효율성 수준을 파악하고, 효율적 항만이 되기 위한 주요 전략수립 방안을 제시하고자 하는 것이다, 동북아시아 지역의 주요 16개 항만을 대상으로 개별항만 효율성 및 상대적 효율성을 분석하였으며, DEA기법을 사용했다. DEA모형 중 규모수익불변모형인 CCR모형과 규모수익가변모형인 BCC모형을 통해 항만 효율성을 분석하며, 또한 CCR모형에 의해 평가된 효율성을 BCC모형에 의해 평가된 효율성으로 나눈 비율인 규모의 효율성 측면에서도 효율성을 분석하였다. 이러한 방법의 실증분석을 시행함에 있어서 투입요소로는 선석 수, 안벽 길이, 수심, 부두 총면적, C/C 대수를 이용하고, 산출요소로는 컨테이너 물동량을 이용했다. 연구 결과, 중국의 경우, 대부분의 항만이 효율적으로 나타난 반면, 한국과 일본의 경우 대체적으로 비효율적인 것으로 나타났다. 특히, 부산항과 상해항, 롄윈강항과 인천항, 다롄항과 광양항이 투입요소가 유사하지만 산출요소인 컨테이너 물동량은 큰 차이가 있는 것으로 나타났다. The purpose of this study is to suggest a major strategy to become effective for each port in Northeast Asia by analyzing the relative efficiency of each port to determine the current level of efficiency, efficient harbors plan. Individual port of the major 16 ports in Northeast Asia was analysed targeting efficiency and relative efficiency. In this study, DEA technique was used. Of the DEA model, CCR (constant returns to scale) models and BCC (variable return to scale) model was applied to analyze the efficiency and effectiveness of the port. Then the efficiency measured through CCR model is again compared with the efficiency measured by the BCC model. In this way, the empirical analysis includes the input factors of the operating ports such as the number of berths, wharf, depth, total area of the pier, C / C numbers and output elements includes the container throughput. The results of the study show that most of the ports in China is efficient whereas those in Korea and Japan are relatively inefficient. There are some pairs of ports which has the similar input factors, like Busan port and Shanghai port, Lianyungang port and Incheon port, Dalian port and Gwangyang port, but the container throughput of them has a huge difference.

DEA ranking of municipalities of the Republic of Serbia based on efficiency of SMEs in agribusiness

The most important aspect of any business is efficiency. The goal is to achieve a greater output results using less inputs, i.e. to maximize the use of available inputs. Numerous mathematical and statistical procedures, such as DEA technique (Data Envelopment Analysis), take an important place in the process of the effective management of the company and its business activities. This paper illustrated the application of DEA technique in assessing the business efficiency of SMEs in agribusiness in Vojvodina Measuring the efficiency of business operations of SMEs is based on the values of the following indicators: fixed assets, working capital, number of companies, number of employees, total income, profit and loss. The data used to calculate the values of indicators of business efficiency were obtained from the Statistical Office of the Republic of Serbia, based on the annual accounts of SMEs in agribusiness for four-year average (2008-2011). The aim of this paper is statistical assessment of business efficiency of SMEs in agribusiness using DEA technique, and then, based on the results obtained, to perform the ranking of Vojvodina municipalities in which observed SMEs were located, and finally, based on 4 models, to show sensitivity of DEA technique compared to different combination of input / output indicators, so therefore, caution is needed when this method is used. If the combination of parameters in the model is better, the results are more realistic, since if a key parameter is omitted, wrong decisions could be made.

The Total Factor Productivity of Libyan Banks, 2004 – 2010

This paper provides a comparative analysis regarding the performance of 17 Libyan banks over the period 2004 up to 2010. According to the relevant literature, there are few studies that measure both technical efficiency and Malmquist productivity index approach using non – parametric approach (DEA) for the banking sector in Libya. For this study, the DEA technique was used to estimate technical, pure technical, and scale efficiency of sampled banks by using DEAP software. . The results showed that the specialized banks have exhibited higher mean technical efficiency relative to commercial and private banks. This paper concludes with some policy implications of the results. The results for total factor productivity (TFP) showed 11 of 17 Libyan banks decline because TFP levels of banks drawn by negative technical efficiency change (less than 1) or by negative technological change, or both of them are negative.

Ranking bank branches using DEA and multivariate regression models

Service companies continually seek improved methods to measure the performance of their organisations because they are committed to improve efficiency and effectiveness in their operating units. Managers generally regard conventional methods inadequate. DEA has proven itself to be both theoretically sound framework for performance measurement and an acceptable method by those being measured. This paper assesses bank branches efficiency using DEA technique and multivariate regression techniques. Here, we proposed two multivariate regression models. In model (1), we used the exact data and in model (2), we used weighted data for fitting the regression equation. Weights were attributed to input variables based on group analytic hierarchy process. The efficiency of this approach is tested with application in bank branches. According to the results, weighted multivariate regression model has more advantages over conventional methodologies. LINGO software is used for obtaining efficiency scores in DEA.

Economic Reforms and Sources of Productivity Growth in Selected Organised Manufacturing Labour Intensive and Capital Intensive Industries in India - A Comparative Study

This study uses the non parametric data envelopment technique to investigate the impact of economic reforms on Total Factor Productivity Growth in Selected 20 Indian Organised Manufacturing Industries by classifying them into Labour Intensive and Capital Intensive industries; by using non parametric DEA technique to four-digit panel data for the period 1990 to 2011. The study reveals that the Labour Intensive Industries have negative Total Factor Productivity Growth as -6.1% deteriorated mainly due to Technological Change which is -4%. Meanwhile, the Capital Intensive Industries have positive Total Factor Productivity Growth of 6.7%, mainly contributed by Efficiency Change of 1.6% and Technological Change of 5.0%. Eight out of ten Organised Manufacturing Capital Intensive Industries have shown positive Total Factor Productivity Growth during the economic reform period, whereas seven out of ten Organised Manufacturing Labour Intensive Industries showed negative Total Factor Productivity Growth due to lack of technological change.

Evaluating the technical efficiency of African economies using DEA and the bootstrap approach

It is well-acknowledged that many African economies perform well below their potential, yet there is little knowledge about the distance of these economies from their productivity frontiers. This study examines the technical efficiency of 43 African countries using the non-parametric DEA technique and the double-bootstrap approach. Technical efficiency results by income class show that the best performers in terms of technical efficiency are countries belonging to the upper middle group, followed by the lower upper middle-income countries, while the least efficient countries belong to the lower income economies. Double bootstrap and truncated regression results show that improvements in governance, promotion of FDI, and information communication technologies are major drivers of technical efficiency. This study provides direction and opportunities for African countries to increase output by improving efficiency of resource utilisation.

COMPARATIVE ANALYSIS ON THE EFFICIENCY OF THE FIRM AND THEIRS DETERMINANTS OF EUROPEAN TRANSITION ECONOMICS

In this study we evaluate the efficiency of the firms with DEA technique and bootstrapping procedure in eleven transition economics among sixth industrial and service sectors in a cross-section 2005. At the second stage, we study the relationship between corrected efficiency scores and possible explanatory variables. On one hand, our result shows statistically significant differences in efficiency levels across countries and sectors. Likewise, significant levels of inefficiency are identified especially in service sectors (Hotels and Restaurants, Retail and Wholesale and Transport). On the others hand, the results of the analysis in second stage confirmed the existence of a significant relationship between the country that firms operate (country-effect) and firm′s age (learning by doing). The latter relationship between age and efficiency has different behaviors according to the sector concerned, in the form of U shape in the Hotels and Restaurants, inverted U shape in Metal and Machinery and Wood and Furniture and linear in the Retail and Wholesale sector. Contrary perhaps to expectations, the results also allow us to conclude that there is no important statistically significant relationship between the efficiency and variables related to the strategies implemented by firms and the control of the property.

Hybrid Recommendation Technique Selection Center Donated Bags with Data Envelopment Analysis

The main purpose of this paper to present Natural Disasters problem case study Thailand flood 2554 To hybrid recommendation technique Selection center donated bags is deemed to be one of challenging problems that can be used to imply the management competency due to the fact that it is a difficult and complicated task in logistics supplier function. This article aims to introduce an approach to measuring the Shelters performance by using Data Evaluation Analysis. The DEA is a linear programming-based technique with less complication and exists an available method of simplex algorithms to solve the problem for measuring the efficiency of suppliers. The paper illustrates how to apply the DEA technique by using the data collected from donor bags person plant, which is making contact with 10 center donated bags to provide required for the Shelters plant. To evaluate the performance of the center donated bags, the procurement department employs input criteria of quality, and delivery. The results of the evaluation indicate that there are only center donated bags marked as relative efficient firms and the remaining 10 center donated bags are sorted as non-efficient firms. In addition, the results can be used to create negotiation strategies performance for send bags the Shelters from the inefficient center donated bags by using the value of reference time, weights. Specifically, the inefficient center donated bags will have to reduce the value of the input criteria by the proportion of reference weights in order that the inferior center donated bags could be attained to the benchmark points of relative efficiency.

The Technical Efficiency of Departments of Shiraz Medical School in Research Arena Using Data Envelopment Analysis

Introduction: An efficient university should have a real goal and could produce the most output with the least use of inputs. Evaluation systems are an inseparable part of each organization and university. By efficiency calculation, useful information will be created about strengths, weaknesses, opportunities, threats, and opportunities for improvement. Data envelopment analysis is a useful technique for evaluation of efficiency. This technique needs all the inputs and outputs to be measured precisely. Methods and material: The present study is a descriptive, analytical, cross-sectional, and retrospective research which measures the research efficiency of educational departments of Shiraz faculty of medicine by using DEA technique from 2006 to 2011. Extracted data were analyzed by Microsoft excel and DEA master software. Finding: Department of pediatric and psychiatrics were efficient from 2006 to 2011. Other departments have some inefficiency. Neurosurgery department has least average of efficiency. The average of technical efficiency for all departments was 73.873. Conclusion: where the difference between efficiency score of the department and 100 is more, the department’s needs to improve its outputs will be more. Those groups which are more inefficient waste the resources more. This method also could help the faculty of medicine to identify their weakness and try for improvement

Efficiency of Foreign Banks in Small Financial Sectors: Empirical Evidence from Fiji

Motivated by the Sharma and Gounder (2012b) finding that deposits may play a key role in enhancing bank credit to private sector in the Pacific, this study investigates a pertinent gap in the literature — the efficiency of banks in the region in converting deposits into credit. Data limitations restrict our investigation to Fiji only but provide additional insights on bank efficiency studies — that of banks in a foreign–controlled, small financial sector. DEA technique is used to measure the efficiency of all five banks over the 2000-2010 period. On one hand banks remain highly profitable and well capitalised but on the other they may be relatively inefficient in converting mobilised deposits into private sector credit. Moreover, the overall efficiencies may have deteriorated over time. Policy implications emerge, including requiring banks to become more efficient producers of credit. In light of the structural and operational similarities of financial sectors across the Pacific, the results of this study and policy implications are likely to apply to the rest of the Pacific.

Does Market Power Influence High Bank Profits in the Pacific's Small Island States? Some Evidence from Fiji

This is the first study to simultaneously estimate the influence of market power and efficiency on profitability of banks in a Pacific Island context. Two market power hypotheses — the Structure-Conduct-Performance (SCP) and the Relative-Market-Power (RMP) hypotheses together with two measures of the Efficient–Structure (ES) — X- and scale efficiencies are estimated. The non-parametric DEA technique is used to estimate the two efficiency scores for banks in Fiji over the 2000-2010 period and the dynamic GMM to estimate the relationships between market power and efficiency vis-a-vis profitability. Results show that the RMP and ES theories might hold but not the SCP. Profits appear to persist over time. Policy implications are considerable including that any suggestions to limit further mergers and acquisitions of banks in the region may have to be properly debated.

A New Approach for Assessing Dealership Performance: An Application for the Automotive Industry

The competitive nature of the contemporary business scenario requires productivity-driven organizations to be aware of the efficiency level of their dealers. The recent economic and financial crisis has highlighted the need for effective evaluation methods going beyond the limits of traditional performance assessment methodologies in the retail industry. The automotive industry is no exception to this logic. In this sector, traditional methods are often based only on market share performances, ignoring the key role of input-output ratios on the overall productivity of the parent company. Following this lead, in this paper we propose a method to evaluate the performance of dealerships taking into account both their market share performances and their efficiency. In order to assess dealership efficiency we use the DEA technique, and apply the proposed methodology to a multinational automotive company considering its Italian dealer network.

Qualitative and quantitative assessment of selected Melli bank branches in northern Tehran by using data envelopment analysis based on the balanced scored card in Iran

In today's competitive world, many manufacturing and service companies have been forced to take up new approaches to management. Among these approaches, we can point to one of the new methods of performance evaluation called data envelopment analysis technique that has an important role in improving the performance of an organization. Among challenges of this technique is to select appropriate indicators in order to introduce input and output variables for DEA, therefore the approach of balanced scored card (BSC) is used to mitigate this challenge that as a new tool for performance evaluation allows the research variables to be explained in order to be employed in DEA technique based on a holistic vision and various organizational aspects (financial, internal processes, customer, growth and learning). In this study, we tried to measure the efficiency of 48 top and grade-one branches of Tehran-North in the 2013 timeframe, not only the financially, but also the aspects of financial, customer, internal process and learning and growth; by combining the DEA-BSC technique and with the model of yield super-efficiency in constant scale of DEA enveloping input-oriented form that is capable to announce the efficiency ranking for units and to rank the efficient units simultaneously. The results showed that average efficiency rate from four perspectives: financial, customer, internal process and learning and growth of BSC model is 0.68, 0.63, 0.44, 0.65, respectively, and in total, the average efficiency of branches is 0.6 in this year and it indicates that the most major alignment with macro- strategies of branches is in the financial perspective. Also, Anahita branch was introduced as the most efficient unit from each four perspectives of the BSC model in compared to the other branches.

Direct mailing decisions based on the worst and best practice cross-efficiency evaluations

The problem argued in the literature of direct mailing decisions generally contains three parts: 1 forecasting customers' future purchase/non-purchase responses; 2 evaluating the effectiveness of various strategies for increasing customers purchase responses; 3 prioritising the customers in terms of their values. A significant body of the literature has been dedicated to the first two components, and in particular, to purchase/non-purchase prediction modelling. However, in the current paper, we do not address these two components, but rather we focus on the third component. To this end, data envelopment analysis DEA technique and particularly cross-efficiency formulation of the best practice frontier Charnes, Cooper and Rhodes CCR Charnes et al., 1978 BPF-CCR is used to determine those customers who should be put on the first priorities of marketing mailing list. In addition, the cross-efficiency formulation of worst practice frontier CCR WPF-CCR is developed to exclude the worst customers from mailing list and save the mailing expenses for the best practice ones. Using a numerical example, the application of the proposed model is demonstrated.

Efficiency dynamics and sustainability of the Indian IT-ITeS industry: An empirical investigation using DEA

Efficiency considerations of the Indian IT-ITeS industry have come to the forefront especially with slowdown in the US and other major industrialised economies. Using the DEA technique, this paper argues that the key to sustainability rests on the operational efficiency of the players. Primary data for this study has been collected from STP Kolkata for a period of 15 years. The results reveal that (technical) efficiency varies across industry segments and increases with greater global orientation of the unit. The study prescribes segment-specific policies for sustainability of the industry instead of a uniform policy that has been the usual practice.

Productivity Indices and Efficiency Estimation of Indian Cement Industry

The term productivity was used for the first time over two centuries ago, in the Journal de l’ Agriculture (Tangen, S., 2005). It has been applied in many different circumstances, particularly in relation to economic system, at various levels of aggregation. Productivity is the ratio of what is produced by an operation of process to what is required to produce it, or put simply the ratio of actual output to input over a period of time. Inputs might include transforming and transformed resources (such as materials, equipment, customers and staff) and the outputs are goods and services (Schroeder, R.G., 1985; Slack, N et al, 2001). Measurement of productivity is associated with the extraction of the share of factor input from an increment in output which otherwise cannot be accounted for by mere increase in the quantity of input. Alternatively, productivity means a ratio of actual output to expect resources used. In simpler version, it can be understood as how much and how well one produces from the resources used. If more is produced or better goods are yielded from the same resources, increase in productivity is understood. Productivity varies due to differences in technology, differences in the efficiency in the production process and the differences in the environment in which the production unit operates. The usual method of analysis of productivity is based on the standard definition of production function where it is assumed that maximum output is attended at a given level of input. There are various productivity measures. The choice between them depends on the purpose of productivity measurement and, in many instances, on the availability of the data. Broadly, the measures can be classified as single factor productivity measures (relating to measure of output to a single measure of input) or Multifactor productivity measures (relating a measure of output to a bundle of inputs). Another distinction, of particular relevance at the industry or firm level is between productivity measures that relate some measure of gross output to one or several inputs and those which use a value added concept to capture movement of output. These are measures of labour and capital productivity, and multifactor productivity measures (MFP), in the form of capital- labour MFP, based on a value-added concept of output, or in the form of capital-labor-energy-materials MFP (KLEMS), based on a concept of Gross Output. Among those measures, value added based labour productivity is the single most frequently computed productivity statistics, followed by capital-labour MFP and KLEMS MFP. The Proposed paper is an attempt to measure the Productivity of Indian Cement Industry through the empirical study for a period of 33 Years starting from 1973-74. ASI data is been used with Price correction at WPI (2001-02) and CPI (2002-03) Bases. The productivity indices like Technological change measured through Elasticity of Substitution amongst core factor inputs like labour and capital, Total factor Productivity based on Solow Model on Technological Progress, Capital Intensity and DEA technique to measure Allocative and Technical Efficiencies with 18 decision making units (18 States) and Total Outputs-Net Value Added, Gross Capital Formation & Income are considered for analysis. 2004-05 ASI data is been used.

Estimation of Production Function and Productivity of Indian Cement Industry

Productivity is referred to as faculty to produce or what a man can accomplish with material and capital under the known state of technology. However, in economics, productivity is understood as ratio of units of output to units of input. Alternatively, productivity means a ratio of actual output to expect resources used. In other words, Productivity means how much and how well one produces from the resources used. If more is produced or better goods are yielded from the same resources, increase in productivity is understood. Although the definition of productivity appears straightforward, for three major reasons it is difficult to deal with (Anderson, T.D., 1996; Fitzsimmons, J.A. and M.J. Fitzsimmons, 1997: Witt, C.A. and S.F. Witt, 1989). First, the outputs are usually expressed in different forms to the inputs. Outputs are often measured in physical terms such as units (e.g. cars produced), tones (of paper), kilowatts (of electricity), or value (Euros) for example. However the inputs are usually physically different and include measures of people (numbers, skills, hours worked or costs) or materials (tones and costs) for example. Second, the ratio by itself tells us little about performance. A ratio of 0.75 is of little value unless it is compared with previous time periods, or a benchmark, or the potential productivity of the operation. Third, many different ratios can be used (both financial and nonfinancial, that can be used to create productivity ratios).The Proposed paper is an attempt to measure the Productivity of Indian Cement Industry through the empirical study for a period of 33 Years starting from 1973-74. ASI data is been used with Price correction at WPI (2001-02) and CPI (2002-03) Bases. The productivity indices like Technological change measured through Elasticity of Substitution amongst core factor inputs like labour and capital, Total factor Productivity based on Solow Model on Technological Progress, Capital Intensity and DEA technique to measure Allocative and Technical Efficiencies with 18 decision making units (18 States) and Total Outputs- ,Net Value Added ,Gross Capital Formation & Income are considered for analysis. 2004-05 ASI data is been used.