Designing and Evaluating Sustainable Logistics Networks

The objective in this paper is to shed light into the design of logistic networks balancing profit and the environment. More specifically we intend to i) determine the main factors influencing environmental performance and costs in logistic networks ii) present a comprehensive framework and mathematical formulation, based on multiobjective programming, integrating all relevant variables in order to explore efficient logistic network configurations iii) present the expected computational results of such formulation and iv) introduce a technique to evaluate the efficiency of existing logistic networks.The European Pulp and Paper Industry will be used to illustrate our findings.Eco-efficiency;Data Envelopment Analysis (DEA);Multi-Objective Programming (MOP);Supply Chain Design;Sustainable Supply Chain

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-

A Data Envelopment Analysis Approach to the Assessment of Natural Parks’ Economic Efficiency and Sustainability. The Case of Italian National Parks

Wilderness protection is a growing necessity for modern societies, and this is particularly true for areas where population density is extremely high, as for example Europe. Conservation, however, implies very high opportunity costs. It is thus crucial to create incentives to efficient management practices, to promote benchmarking and to improve conservation management. In the present paper we propose a methodology based on Data Envelopment Analysis, DEA, a non parametric benchmarking technique specifically developed to assess the relative efficiency of decision-making units. In particular, the objective of the discussed methodology is to assess the relative efficiency of the management units of the protected area and to indicate how it could be improved, by providing a set of guidelines. The main advantage of this methodology is that it allows to assess the efficiency of natural parks’ management not only internally (comparing the performance of the park to itself in time) but also by external benchmarking, thus providing new and different perspectives on potential improvements. Although the proposed methodology is fairly general, we have applied it to the context of Italian National Parks in order to produce a representative case study. Specifically, the choice of adequate cost and benefit indicators is a very important and delicate phase of any benchmark analysis. For this purpose, a questionnaire was used to investigate the opinions of Italian National Parks managers and stakeholders and to define the relevant indicators for the analysis. Finally, relevant policy implications for the case study are given.Data envelopment analysis, Natural park management

Total factor productivity growth in European stock exchanges: A non-parametric frontier approach

This paper examines progressive changes in productivity of the European stock exchange industry using non-parametric frontier techniques. Within the framework of Malmquist indices, total factor productivity growth is decomposed into technological progress and technical efficiency change for a balanced panel of all major European stock exchanges over the period 1993–1999. The principal findings indicate an overall rise in productivity over the sample period, which is driven more by technological innovation than by efficiency improvements. According to organisational setup, technological innovation is more pronounced for exchanges with the following characteristics: automation, equity and derivatives trading, for-profit governance structure, large or medium-size capitalised markets. Technological progress can be interpreted as a sign of the dynamic nature of the whole exchange industry, in which stock exchanges take advantage of intense diffusion of new cost-effective technologies and information systems to leverage themselves onto a higher production frontier.stock exchanges; productivity; technological progress; Europe

Using Data Envelopment Analysis to Assess the Relative Efficiency of Different Climate Policy Portfolios

Within the political, scientific and economic debate on climate change, the process of evaluating climate policies ex-ante, during and/or ex-post their lifetime, is receiving increasing attention from international institutions and organisations. The task becomes particularly challenging when the aim is to evaluate strategies or policies from a sustainability perspective. The three pillars of sustainability should then be jointly considered in the evaluation process, thus enabling a comparison of the social, the environmental and the economic dimensions of the policy’s impact. This is commonly done in a qualitative manner and is often based on subjective procedures. The present paper discusses a data-based, quantitative methodology to assess the relative performances of different climate policies, when long term economic, social and environmental impacts of the policy are considered. The methodology computes competitive advantages as well as relative efficiencies of climate policies and is here presented through an application to a sample of eleven global climate policies, considered as plausible for the near future. The proposed procedure is based on Data Envelopment Analysis (DEA), a technique commonly employed in evaluating the relative efficiency of a set of decision making units. We consider here two possible applications of DEA. In the first, DEA is applied coupled with Cost-Benefit Analysis (CBA) in order to evaluate the comparative advantages of policies when accounting for social and environmental impacts, as well as net economic benefits. In the second, DEA is applied to compute a relative efficiency score, which accounts for environmental and social benefits and costs interpreted as outputs and inputs. Although the choice of the model used to simulate future economic and environmental implications of each policy (in the present paper we use the FEEM RICE model), as well as the choice of indicators for costs and benefits, represent both arbitrary decisions, the methodology presented is shown to represent a practical tool to be flexibly adopted by decision makers in the phase of policy design.Climate, Policy, Valuation, Data envelopment analysis, Sustainability

Disentangling the European airlines efficiency puzzle: a network data envelopment analysis approach

© 2015 Elsevier Ltd. In recent years the European airline industry has undergone critical restructuring. It has evolved from a highly regulated market predominantly operated by national airlines to a dynamic, liberalized industry where airline firms compete freely on prices, routes, and frequencies. Although several studies have analyzed performance issues for European airlines using a variety of efficiency measurement methods, virtually none of them has considered two-stage alternatives - not only in this particular European context but in the airline industry in general. We extend the aims of previous contributions by considering a network Data Envelopment Analysis (network DEA) approach which comprises two sub-technologies that can share part of the inputs. Results show that, in general, most of the inefficiencies are generated in the first stage of the analysis. However, when considering different types of carriers several differences emerge - most of the low-cost carriers' inefficiencies are confined to the first stage. Results also show a dynamic component, since performance differed across types of airlines during the decade 2000-2010

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

The impact of competition on productive efficiency in European railways

This paper empirically explores the relationship between competition design and productive efficiency in the railway industry. We use Data Envelopment Analysis (DEA) to construct efficiency scores, and explain these scores, using variables reflecting institutional factors and competition design. Our results suggest that competitive tendering improves productive efficiency, which is in line with economic intuition as well as with expectations on the design of competition. We also find that free entry lowers productive efficiency. A possible explanation for this result is that free entry may disable railway operators to reap economies of density. Our final result is that more autonomy of management lowers productive efficiency. Most of the incumbent railway companies are state owned and do not face any competitive pressure. As a consequence, increased independence without sufficient competition and adequate regulation may deteriorate incentives for productive efficiency.

Developments in linear and integer programming

In this review we describe recent developments in linear and integer (linear) programming. For over 50 years Operational Research practitioners have made use of linear optimisation models to aid decision making and over this period the size of problems that can be solved has increased dramatically, the time required to solve problems has decreased substantially and the flexibility of modelling and solving systems has increased steadily. Large models are no longer confined to large computers, and the flexibility of optimisation systems embedded in other decision support tools has made on-line decision making using linear programming a reality (and using integer programming a possibility). The review focuses on recent developments in algorithms, software and applications and investigates some connections between linear optimisation and other technologies

Testing for Economies of Scope in European Railways: An Efficiency Analysis

In this paper, we conduct a pan-European effciency analysis to investigate the performance of European railways with a particular focus on economies of vertical integration. We test the hypothesis that integrated railways realize economies of scope and, thus, produce railway services with a higher level of effciency. To determine whether joint or separate production is more effcient, we apply a Data Envelopment Analysis super-effciency bootstrapping model which relates the ef- ficiency for integrated production to a reference set consisting of separated firms which use a dierent production technology. We find that for a majority of European railways economies of scope exist.Efficiency, Vertical Integraton, Railway Industry