Quantitative Models for Performance Evaluation and Benchmarking

by Zhu, Joe

• ISBN13: 9780387859811
• ISBN10: 0387859810
• Edition: 2nd
• Format: Hardcover
• Copyright: 2009-02-28
• Publisher: Springer Verlag

Summary

It is difficult to evaluate an organization's performance when there are multiple inputs and multiple outputs to the system. The difficulties are further enhanced when the relationships between the inputs and the outputs are complex and involve unknown tradeoffs. This book introduces DEA as a multiple-measure performance evaluation and benchmarking tool. The focus of performance evaluation and benchmarking is shifted from characterizing performance in terms of single measures to evaluating performance as a multidimensional systems perspective.This second edition improves a number of DEA spreadsheet models and provides a DEAFrontier software for use with Excel 2007. Several new DEA models and approaches are added. For example, a new DEA-based supply chain model (chapter 8) and DEA models for two-stage processes (Chapter 14) are new additions to the book. Models with restricted multipliers are also discussed and added into the DEAFrontier software. A detailed use of sensitivity analysis in identifying critical measures under DEA is provided. A demonstration of how to use the DEAFrontier software is provided at the end of related chapters. Conventional and new DEA approaches are presented and discussed using Excel spreadsheets '” one of the most effective ways to analyze and evaluate decision alternatives. The user can easily develop and customize new DEA models based upon these spreadsheets. Spreadsheets are updated and modified for use with Excel 2007.This book also provides an easy-to-use DEA software '” DEAFrontier. This DEAFrontier is an Add-In for Microsoft® Excel and provides a custom menu of DEA approaches which include more than 150 different DEA models. DEAFrontier softwares are provided for both Excel 97-2003 and Excel 2007 and can solve up to 100 DMUs. It is an extremely powerful tool that can assist decision-makers in benchmarking and analyzing complex operational efficiency issues in manufacturing organizations as well as evaluating processes in banking, retail, franchising, health care, public services and many other industries.For a free version of DEAFrontier, please visit www.deafrontier.com.

Author Biography

Joe Zhu is Associated Professor of Operations, Department of Management at Worcester Polytechnic Institute, Worcester, MA. His research interests include issues of performance evaluation and benchmarking, supply chain design and efficiency, and Data Envelopment Analysis. He has published over 70 articles in journals such as Management Science, Operations Research, IIE Transactions, Annals of Operations Research, Journal of Operational Research Society, European Journal of Operational Research, Information Technology and Management Journal, Computer and Operations Research, OMEGA, Socio-Economic Planning Sciences, Journal of Productivity Analysis, INFOR, Journal of Alternative Investment and others. He is the author of Quantitative Models for Evaluating Business Operations: Data Envelopment Analysis with Spreadsheets (Kluwer Academic Publishers, 2003). He developed the DEAFrontier software which is a DEA add-in for Microsoft Excel. Professor Zhu has also co-authored two books on modeling performance measurement and evaluating hedge funds. He is a co-editor of the DEA handbook. He is an Associate Editor of OMEGA and The Asia-Pacific Journal of Operational Research. He is also a member of Computers & Operations Research Editorial Board. For more information on his research, please visit www.deafrontier.com.

Table of Contents

Preface	p. xi
Envelopment DEA Models
Performance Evaluation, Tradeoffs, and DEA	p. 1
Envelopment Model	p. 5
Envelopment Models in Spreadsheets	p. 14
Solving DEA Using DEAFrontier Software	p. 35
References	p. 41
Multiplier and Slack-based Models
Multiplier Model with Weight Restrictions	p. 43
Multiplier Models in Spreadsheets	p. 45
Slack-based Model	p. 51
Slack-based Models in Spreadsheets	p. 53
Solving DEA Using DEAFrontier Software	p. 57
References	p. 61
Measure-specific DEA Models
Measure-specific Models	p. 63
Measure-specific Models in Spreadsheets	p. 64
Performance Evaluation of Fortune 500 Companies	p. 66
Solving DEA Using DEAFrontier Software	p. 75
References	p. 76
Non-radial DEA Models and DEA with Preference
Non-radial DEA Models	p. 77
DEA with Preference Structure and Cost/Revenue Efficiency	p. 79
DEA/Preference Structure Models in Spreadsheets	p. 83
DEA and Multiple Objective Linear Programming	p. 85
Solving DEA Using DEAFrontier Software	p. 90
References	p. 95
Modeling Undesirable Measures
Introduction	p. 97
Efficiency Invariance	p. 98
Undesirable Outputs	p. 99
Undesirable Inputs	p. 103
Solving DEA Using DEAFrontier Software	p. 104
Negative Data	p. 105
References	p. 107
Context-dependent Data Envelopment Analysis
Introduction	p. 109
Stratification DEA Method	p. 111
Input-oriented Context-dependent DEA	p. 115
Output-oriented Context-dependent DEA	p. 123
Solving DEA Using DEAFrontier Software	p. 127
References	p. 129
Benchmarking Models
Introduction	p. 131
Variable-benchmark Model	p. 132
Fixed-benchmark Model	p. 143
Fixed-benchmark Model and Efficiency Ratio	p. 146
Minimum Efficiency Model	p. 150
Buyer-seller Efficiency Model	p. 153
Solving DEA Using DEAFrontier Software	p. 158
References	p. 160
Models for Evaluating Supply Chains
Supply Chain Efficiency	p. 161
Supply Chain Efficiency	p. 163
Cooperative and Non-Cooperative Approaches	p. 174
References	p. 186
Congestion
Congestion Measure	p. 187
Congestion and Slacks	p. 193
Slack-based Congestion Measure	p. 195
Solving DEA Using DEAFrontier Software	p. 201
References	p. 203
Super Efficiency
Super-efficiency DEA Models	p. 205
Infeasibility of Super-efficiency DEA Models	p. 209
Solving DEA Using DEAFrontier Software	p. 223
References	p. 225
Sensitivity Analysis
DEA Sensitivity Analysis	p. 227
Stability Region	p. 230
Infeasibility and Stability	p. 242
Simultaneous Data Change	p. 246
Solving DEA Using DEAFrontier Software	p. 264
References	p. 266
Identifying Critical Measures in DEA
Introduction	p. 269
Performance Evaluation and DEA	p. 269
Identifying Critical Output Measures	p. 274
Identifying Critical Input Measures	p. 275
Numerical Example and Extension	p. 277
Application to Fortune E-Companies	p. 278
References	p. 287
Returns-to-Scale
Introduction	p. 289
RTS Regions	p. 290
RTS Estimation	p. 291
Scale Efficient Targets	p. 299
Solving DEA Using DEAFrontier Software	p. 301
References	p. 303
DEA Models for Two-Stage Processes
Introduction	p. 305
VRS Two-Stage Model	p. 306
CRS Two-Stage Model	p. 312
Solving DEA Using DEAFrontier Software	p. 317
References	p. 318
Author Index	p. 319
Topic Index	p. 323
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