Quantitative Models for Performance Evaluation and Benchmarking

by Zhu, Joe

• ISBN13: 9781402070822
• ISBN10: 1402070829
• Format: Hardcover
• Copyright: 2002-10-01
• Publisher: Kluwer Academic Pub

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. New DEA models and approaches are presented to deal with performance evaluation problems in a variety of contexts. A context-dependent DEA measures the relative attractiveness of similar operations/processes/products. Sensitivity analysis techniques can be easily applied and used to identify critical performance measures. Value chain efficiency models and DEA benchmarking models can be utilized to study the impact of information technology (IT) investments. These models can help organizations better understand the real impact of their IT investments and integrate technology more efficiently and effectively for the future. Conventional and new DEA approaches are presented and discussed using 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. This book also provides easy-to-use DEA software - DEA Excel Solver. This DEA Excel Solver is an Add-In for Microsoft(r) Excel and provides a custom menu of DEA approaches, which include more than 150 different DEA models. 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, e-business, public services and many other industries. The DEA Excel Solver does not set limit on the number of units, inputs or outputs. With the capacity of Excel Solver, the DEA Excel Solver can deal with large sized performance evaluation tasks. For a free version of DEA Excel Solver, please visit www.deafrontier.com.

Table of Contents

List of Tables	xi
List of Figures	xv
Preface	xxi
Basic DEA Models
Performance Evaluation, Tradeoffs, and DEA	1	(4)
Envelopment Model	5	(8)
Envelopment Models with Variable Returns to Scale	5	(6)
Other Envelopment Models	11	(2)
Envelopment Models in Spreadsheets	13	(21)
Input-oriented VRS Envelopment Spreadsheet Model	14	(2)
Using Solver	16	(1)
Specifying the Target Cell	17	(1)
Specifying Changing Cells	18	(1)
Adding Constraints	18	(1)
Non-Negativity and Linear Model	18	(1)
Solving the Model	19	(1)
Automating the DEA Calculation	20	(4)
Calculating Slacks	24	(2)
Other Input-oriented Envelopment Spreadsheet Models	26	(2)
Output-oriented Envelopment Spreadsheet Models	28	(6)
Multiplier Model	34	(1)
Multiplier Models in Spreadsheets	34	(5)
Slack-based Model	39	(2)
Slack-based Models in Spreadsheets	41	(6)
Measure-specific DEA Models
Measure-specific Models	47	(1)
Measure-specific Models in Spreadsheets	48	(2)
Performance Evaluation of Fortune 500 Companies	50	(11)
Identification of Best Practice Frontier	50	(2)
Measure-specific Performance	52	(4)
Benchmark Share	56	(5)
Returns-to-Scale
Introduction	61	(1)
RTS Regions	61	(2)
RTS Estimation	63	(7)
VRS and CRS RTS Methods	63	(2)
Improved RTS Method	65	(1)
Spreadsheets for RTS Estimation	66	(4)
Scale Efficient Targets	70	(2)
RTS Classification Stability	72	(15)
Input-oriented RTS Classification Stability	74	(8)
Output-oriented RTS Classification Stability	82	(3)
Spreadsheets for RTS Sensitivity Analysis	85	(2)
Use of RTS Sensitivity Analysis	87	(4)
DEA with Preference
Non-radial DEA Models	91	(2)
DEA with Preference Structure	93	(4)
DEA/Preference Structure Models in Spreadsheets	97	(2)
DEA and Multiple Objective Linear Programming	99	(6)
Output-oriented DEA	100	(2)
Input-oriented DEA	102	(1)
Non-Orientation DEA	103	(2)
Modeling Undesirable Measures
Introduction	105	(1)
Undesirable Outputs	106	(5)
Undesirable Inputs	111	(2)
Context-dependent Data Envelopment Analysis
Introduction	113	(2)
Stratification DEA Method	115	(4)
Input-oriented Context-dependent DEA	119	(8)
Attractiveness	119	(4)
Progress	123	(4)
Output-oriented Context-dependent DEA	127	(4)
Benchmarking Models
Introduction	131	(1)
Variable-benchmark Model	132	(10)
Fixed-benchmark Model	142	(3)
Fixed-benchmark Model and Efficiency Ratio	145	(4)
Minimum Efficiency Model	149	(3)
Buyer-seller Efficiency Model	152	(5)
Models for Evaluating Value Chains
Value Chain Efficiency	157	(1)
Measuring Information Technology's Indirect Impact	158	(10)
IT Performance Model	159	(4)
Efficiency of IT Utilization	163	(5)
Supply Chain Efficiency	168	(13)
Supply Chain as an Input-Output System	169	(2)
Supply Chain Efficiency Model	171	(3)
Measuring Supply Chain Performance	174	(7)
Congestion
Congestion Measure	181	(6)
Congestion and Slacks	187	(2)
Slack-based Congestion Measure	189	(8)
Super Efficiency
Super-efficiency DEA Models	197	(4)
Infeasibility of Super-efficiency DEA Models	201	(16)
Output-oriented VRS Super-efficiency Model	206	(3)
Other Output-oriented Super-efficiency Models	209	(1)
Input-oriented VRS Super-efficiency Model	210	(4)
Other Input-oriented Super-efficiency Models	214	(3)
Sensitivity Analysis and Its Uses
Efficiency Sensitivity Analysis	217	(3)
Stability Region	220	(12)
Input Stability Region	220	(3)
Output Stability Region	223	(2)
Geometrical Presentation of Input Stability Region	225	(7)
Infeasibility and Stability	232	(4)
Simultaneous Data Change	236	(18)
Sensitivity Analysis Under CRS	238	(10)
Sensitivity Analysis under VRS	248	(2)
Spreadsheet Models for Sensitivity Analysis	250	(4)
Identifying Critical Performance Measures	254	(9)
Identifying Critical Output Measures	258	(1)
Identifying Critical Input Measures	259	(4)
DEA Excel Solver
DEA Excel Solver	263	(2)
Data Sheet Format	265	(1)
Envelopment Models	266	(1)
Multiplier Models	267	(1)
Slack-based Models	267	(1)
Measure-specific Models	268	(1)
Returns-to-Scale	269	(2)
Non-radial Models	271	(1)
Preference Structure Models	271	(1)
Undesirable Measure Models	271	(1)
Context-dependent DEA	272	(2)
Variable-benchmark Models	274	(1)
Fixed-benchmark Models	274	(1)
Minimum Efficiency Models	275	(1)
Value Chain Efficiency	275	(1)
Congestion	276	(1)
Weak Disposability Models	276	(1)
Super Efficiency Models	277	(1)
Sensitivity Analysis	277	(1)
Free Disposal Hull (FDH) Models	277	(1)
Malmquist Index	278	(3)
Cost Efficiency, Revenue Efficiency and Profit Efficiency	281	(4)
References	285	(6)
Author Index	291	(2)
Topic Index	293