Analyzing the solutions of DEA through information visualization and data mining techniques: SmartDEA framework

Data envelopment analysis (DEA) has proven to be a useful tool for assessing efficiency or productivity of organizations, which is of vital practical importance in managerial decision making. DEA provides a significant amount of information from which analysts and managers derive insights and guidelines to promote their existing performances. Regarding to this fact, effective and methodologic analysis and interpretation of DEA solutions are very critical. The main objective of this study is then to develop a general decision support system (DSS) framework to analyze the solutions of basic DEA models. The paper formally shows how the solutions of DEA models should be structured so that these solutions can be examined and interpreted by analysts through information visualization and data mining techniques effectively. An innovative and convenient DEA solver, SmartDEA, is designed and developed in accordance with the proposed analysis framework. The developed software provides a DEA solution which is consistent with the framework and is ready-to-analyze with data mining tools, through a table-based structure. The developed framework is tested and applied in a real world project for benchmarking the vendors of a leading Turkish automotive company. The results show the effectiveness and the efficacy of the proposed framework

Multi crteria decision making and its applications : a literature review

This paper presents current techniques used in Multi Criteria Decision Making (MCDM) and their applications. Two basic approaches for MCDM, namely Artificial Intelligence MCDM (AIMCDM) and Classical MCDM (CMCDM) are discussed and investigated. Recent articles from international journals related to MCDM are collected and analyzed to find which approach is more common than the other in MCDM. Also, which area these techniques are applied to. Those articles are appearing in journals for the year 2008 only. This paper provides evidence that currently, both AIMCDM and CMCDM are equally common in MCDM

CAN FISCAL POLICY EXPLAIN TECHNICAL INEFFICIENCY OF PRIVATISED FIRMS? A PARAMETRIC AND NONPARAMETRIC APPROACH

The massive interests of economic literature about the privatisation gave a notable impulse to the discussion about this theme in the pre and post privatisation firms performance. Basically in every case after privatisation the level of profit increases. Does this mean that privatisation is certainly able to increase efficiency? In this field a large part of the literature leave out the complex problem that public firms usually are subject to objectives and constraints that differently from private firms can affect the overall economic efficiency. Unfortunately many authors ignore the effects of taxation during the process of privatisation, but in real term there are significant tax issues that must be considered by public and private decision maker. In this paper we concentrate the attention on the efficiency measures with the purpose to identify and measure sources of successful performance that can be used in policy planning and allocation of resources. Several techniques to calculate these frontier functions have been used, some of them parametric, others non-parametric to empirically investigate the relationship between taxation on firm’s income and efficiency in the period pre and post-privatisation. In this work we use both econometric and mathematical programming approaches for measuring efficiency. The econometric tool provide maximum likelihood estimates of a stochastic production and cost functions to distinguish noise from inefficiency. Instead, the mathematical programming approaches are nonstochastic and they do not make strict assumptions on the functional form of production and the statistical properties of the data. The general results obtained from the 3 different tools (Stochastic Frontier, Data Envelopment Analysis and Neural Network) are consistent. In fact, we see that privatization enhanced efficiency in three out of four sample firms.Privatization, Fiscal policy, Data Envelopment Analysis, Stochastic Frontier, Neural Network

Next Stop: Restructuring?: A Nonparametric Efficiency Analysis of German Public Transport Companies

In this paper, we present a nonparametric comparative efficiency analysis of 179 communal public transport bus companies in Germany (1990-2004). We apply both deterministic data envelopment analysis (DEA) and bootstrapping to test the robustness of our estimates and to test the hypothesis of global and individual constant returns to scale. We find that the average technical efficiency of German bus companies is relatively low. We observe that the industry appears to be characterized by increasing returns to scale for smaller companies. These results would imply increasing pressure on bus companies to restructure.Public transport, buses, efficiency analysis, nonparametric methods, DEA, bootstrapping

Increasing Sustainability of Logistic Networks by Reducing Product Losses: A Network DEA Approach

This paper considers a multiproduct supply network, in which losses (e.g., spoilage of perishable products) can occur at either the nodes or the arcs. Using observed data, a Network Data Envelopment Analysis (NDEA) approach is proposed to assess the efficiency of the product flows in varying periods. Losses occur in each process as the observed output flows are lower than the observed input flows. The proposed NDEA model computes, within the NDEA technology, input and output targets for each process. The target operating points correspond to the minimum losses attainable using the best observed practice. The efficiency scores are computed comparing the observed losses with the minimum feasible losses. In addition to computing relative efficiency scores, an overall loss factor for each product and each node and link can be determined, both for the observed data and for the computed targets. A detailed illustration and an experimental design are used to study and validate the proposed approach. The results indicate that the proposed approach can identify and remove the inefficiencies in the observed data and that the potential spoilage reduction increases with the variability in the losses observed in the different periods.Ministerio de Ciencia DPI2017-85343-PFondo Europeo de Desarrollo Regional DPI2017-85343-

Quota Trading and Profitability: Theoretical Models and Applications to Danish Fisheries

Using Data Envelopment Analysis (DEA), we provide a framework to analyze the potential gains from quota trading. We compare the industry profit and structure before and after a free trade reallocation of production quotas. The effects of tradable production quotas depend on several technological and behavioral characteristics, including the ability to learn best practice (catch-up) and the ability to change the input and output composition (mix). To illustrate the usefulness of our approach, we analyze a dataset from the Danish fishery. We study the industry profit and structure under each of four sets of technological and behavioral characteristics.Data Envelopment Analysis (DEA), Individual Transferable Quotas (ITQ), reallocation, technical efficiency, allocative efficiency, fishery, Agribusiness, C61, L51, Q22, Q28,

Assessing the Efficiency of Mass Transit Systems in the United States

Frustrated with increased parking problems, unstable gasoline prices, and stifling traffic congestion, a growing number of metropolitan city dwellers consider utilizing the mass transit system. Reflecting this sentiment, a ridership of the mass transit system across the United States has been on the rise for the past several years. A growing demand for the mass transit system, however, necessitates the expansion of service offerings, the improvement of basic infrastructure/routes, and the additional employment of mass transit workers, including drivers and maintenance crews. Such a need requires the optimal allocation of financial and human resources to the mass transit system in times of shrinking budgets and government downsizing. Thus, the public transit authority is faced with the dilemma of “doing more with less.” That is to say, the public transit authority needs to develop a “lean” strategy which can maximize transit services with the minimum expenses. To help the public transit authority develop such a lean strategy, this report identifies the best-in-class practices in the U.S. transit service sector and proposes transit policy guidelines that can best exploit lean principles built upon best-in-class practices

Examining green production and its role within the competitive strategy of manufacturers

Purpose: This paper reviews current literature and contributes a set of findings that capture the current state-of-the-art of the topic of green production. Design/methodology/approach: A literature review to capture, classify and summarize the main body of knowledge on green production and, translate this into a form that is readily accessible to researchers and practitioners in the more mainstream operations management community. Findings: The existing knowledge base is somewhat fragmented. This is a relatively unexplored topic within mainstream operations management research and one which could provide rich opportunities for further exploration. Originality/value: This paper sets out to review current literature, from a more conventional production operations perspective, and contributes a set of findings that capture the current state-of-the-art of this topic

Analyzing Firm Performance in the Insurance Industry Using Frontier Efficiency Methods

In this introductory chapter to an upcoming book, the authors discuss the two principal types of efficiency frontier methodologies - the econometric (parametric) approach and the mathematical programming (non-parametric) approach. Frontier efficiency methodologies are discussed as useful in a variety of contexts: they can be used for testing economic hypotheses; providing guidance to regulators and policymakers; comparimg economic performance across countries; and informing management of the effects of procedures and strategies adapted by the firm. The econometric approach requires the specification of a production, cost, revenue, or profit function as well as assumptions about error terms. But this methodology is vulnerable to errors in the specification of the functional form or error term. The mathematical programming or linear programming approach avoids this type of error and measures any departure from the frontier as a relative inefficiency. Because each of these methods has advantages and disadvantages, it is recommended to estimate efficiency using more than one method. An important step in efficiency analysis is the definition of inputs and outputs and their prices. Insurer inputs can be classified into three principal groups: labor, business services and materials, and capital. Three principal approaches have been used to measure outputs in the financial services sector: the asset or intermediation approach, the user-cost approach, and the value-added approach. The asset approach treats firms as pure financial intermediaries and would be inappropriate for insurers because they provide other services. The user-cost method determines whether a financial product is an input or output based on its net contribution to the revenues of the firm. This method requires precise data on products, revenues and opportunity costs which are difficult to estimate in insurance. The value-added approach is judged the most appropriate method for studying insurance efficiency. it considers all asset and liability categories to have some output characteristics rather than distinguishing inputs from outputs. In order to measure efficiency in the insurance industry in which outputs are mostly intangible, measurable services must be defined. The three principal services provided by insurance companies are risk pooling and risk-bearing, "real" financial services relating to insured losses, and intermediation. The authors discuss how these services can be measured as outputs in value-added analysis. They then summarize existing efficiency literature.