Multi-output profit efficiency and directional distance functions

We extend a recently developed DEA methodology for cost efficiency analysis towards profit efficiency settings. This establishes a novel DEA toolkit for profit efficiency assessments in situations with multiple inputs and multiple outputs. A distinguishing feature of our methodology is that it assumes output-specific production technologies. In addition, the methodology accounts for the use of joint inputs, and explicitly includes information on the allocation of inputs to individual outputs. We also establish a dual relationship between our multi-output profit inefficiency measure and a technical inefficiency measure that takes the form of a multi-output directional distance function. Finally, we demonstrate the empirical usefulness of our methodology by an empirical application to a large service company.     

Cross efficiency measurement and decomposition in two basic network systems

The data envelopment analysis (DEA) technique uses the most favorable weights for each decision making unit (DMU) to calculate efficiency. The resulting efficiency scores are thus incomparable and difficult to discriminate. This phenomenon is more prominent for network systems, which involves the ranking of the component divisions, in addition to the system. This paper applies the idea of cross evaluation, which has been demonstrated to be an effective approach in ranking DMUs for systems considered as a whole-unit, to measure the efficiency of the two basic structures of network systems, series and parallel. The proposed model is able to decompose the cross efficiency measure of the system into the product of those of the divisions for the series structure and a weighted average for the parallel structure. The results from two real-world cases, one for the basic series structure and another for the parallel one, show that the cross efficiency measures proposed in this paper not only increase the discriminating power in ranking systems and divisions, but also identify the relationship between the system and division efficiencies. Which division has stronger effects on the performance of the system is reflected from this relationship.     

LASSO variable selection in data envelopment analysis with small datasets

The curse of dimensionality problem arises when a limited number of observations are used to estimate a high-dimensional frontier, in particular, by data envelopment analysis (DEA). The study conducts a data generating process (DGP) to argue the typical “rule of thumb” used in DEA, e.g. the required number of observations should be at least larger than twice of the number of inputs and outputs, is ambiguous and will produce large deviations in estimating the technical efficiency. To address this issue, we propose a Least Absolute Shrinkage and Selection Operator (LASSO) variable selection technique, which is usually used in data science for extracting significant factors, and combine it in a sign-constrained convex nonparametric least squares (SCNLS), which can be regarded as DEA estimator. Simulation results demonstrate that the proposed LASSO-SCNLS method and its variants provide useful guidelines for the DEA with small datasets.     

基于资源共享与子系统交互的两阶段DEA评价方法——兼对我国“一流大学”科研绩效的评价

由于复杂的竞争环境,共享资源下的交互系统组织形式变得越来越普遍,因此有必要开发一种新的方法来衡量这些系统与子系统的效率。针对复杂系统的绩效评价问题,本文提出资源共享与子系统交互的两阶段DEA评价方法予以应对。该方法在测定系统总效率的基础上,运用Stackelberg博弈方法构建模型求解出唯一的子系统(阶段)效率。最后,将该方法应用于我国40所“一流大学”科研系统绩效评价中,评价结果反映出一定的科研系统特征,并验证了该方法的有效性。     

COORDINATION ALTERNATIVES IN A MANUFACTURER/DEALER INVENTORY SYSTEM UNDER STOCHASTIC DEMAND

This paper introduces a stochastic model of a distribution system where the stocking location is owned by a dealer (or retailer) and the product is supplied by a manufacturer. Inventory is managed by the dealer, and the manufacturer is responsible for delivery of the product through both regular replenishment and expedite shipment modes. The dealer and the manufacturer share the goal of providing a high level of customer service. Demand, moreover, is a function of the service level offered to the market by the dealer. We develop optimal stock control policies for the cases where each decision maker in turn is dominant and acts unilaterally while being constrained by the supply/demand linkages of the system. We also develop an optimum policy for the case where both levels are managed under centralized control (i.e., both levels cooperate). Results indicate that the expected profit for a dominant dealer (or dominant manufacturer) is higher under decentralized control than the optimal solution for either under centralized control. However, the centralized solution is a global-optimal solution and therefore will guarantee longterm stability. Differences between the various solutions are analyzed explicitly to estimate the cost of coordination.     

A slack-based measure of efficiency in context-dependent data envelopment analysis

Data envelopment analysis (DEA) has been proven as an excellent data-oriented performance evaluation method when multiple inputs and outputs are present in a set of peer decision-making units (DMUs). In the DEA literature, a context-dependent DEA is developed to provide finer evaluation results by examining the efficiency of DMUs in specific performance levels based upon radial DEA efficiency scores. In DEA, non-zero input and output slacks are very likely to present after the radial efficiency score improvement. Often, these non-zero slack values represent a substantial amount of inefficiency. Therefore, in order to fully measure the inefficiency in DMU's performance, it is very important to also consider the inefficiency represented by the non-zero slacks in the context-dependent DEA. This study proposes a slack-based context-dependent DEA which allows a full evaluation of inefficiency in a DMUs performance. By using slack-based efficiency measure, we obtain different frontier levels and more appropriate performance benchmarks for inefficient DMUs.     

Exploring the efficiency of Mexican universities: Integrating Data Envelopment Analysis and Multidimensional Scaling

National policy initiatives require the expenditure of large amounts of resources over several years. It is common for these initiatives to generate large amounts of data that are needed in order to assess their success. Educational policies are an obvious example. Here we concentrate on Mexico׳s “Educational Modernisation Programme” and try to see how this plan has affected efficiency in teaching and research at Mexico׳s universities. We use a combined approach that includes traditional ratios together with Data Envelopment Analysis models. This mixture allows us to assess changes in efficiency at each individual university and explore if these changes are related to teaching, to research, or to both. Using official statistics for 55 universities over a six year period (2007–2012), we have generated 12 ratios and estimated 21 DEA models under different definitions of efficiency. In order to make the results of the analysis accessible to the non-specialist we use models that visualise the main characteristics of the data, in particular scaling models of multivariate statistical analysis. Scaling models highlight the important aspects of the information contained in the data. Because the data is three-way (variables, universities, and years) we have chosen the Individual Differences Scaling model of Carroll and Chang. We complete the paper with a discussion of efficiency evolution in three universities.     

Do performance and environmental conditions act as barriers for cross-border banking in Europe?

This paper attempts to analyse whether banking technology and environmental conditions act as barriers for the entry of foreign banks in each European banking industry. We evaluate how the efficiency score of a representative commercial bank of a given European country changes if it decides to move abroad. To carry out this analysis, we use a sample of 700 banks belonging to 11 European countries. Countries are paired and each couple is studied by using four DEA production frontiers. These frontiers allow us to measure the technological and environmental gaps between the two countries considered and, based on them, to predict the new efficiency score of the representative bank of a country that decides to operate in a different country. The results indicate, as expected, that being technologically advanced appears to be a significant deterrent to foreign competition, and that adverse environmental conditions constitute a real barrier for cross-border banking activity. Additionally, the results suggest that host-nation banking performance is a good safeguard against cross-border competition.     

考虑多维合作策略的非径向超预期管理效率评价

现有非预期产出问题集中于环境DEA效率评价,普遍以弱可处置性与负导向为前提,无法适应管理效率评价中超预期产出的"策略可处置"、"多维效率扩展"与"评价导向交融"特征。相对现有进展,针对环境DEA弱可处置性的局限,归纳了超预期管理效率的多维合作策略与对应策略作用下的效率溢出效应;针对超预期管理效率策略化评价的非径向测度基础,界定多维合作策略贡献,形成了"投入"合作与"产出"分配意义上的效率评价方案;针对传统DEA方法模糊评价结果不可比难点,引入合作博弈思想构建CSG-DEA模型,统筹了隐藏效率的评价信息再提取与策略联盟收益分配权重折算需求。案例应用结果表明,所构建的方法与策略有效、可行,能够为评价导向特殊、考虑多维合作策略的超预期管理效率评价问题提供决策参考。     

企业风险管理与经营效率:来自中国保险业的经验证据

本文从风险管理的视角对企业效率评估的数据包络分析技术进行了改进,探讨了风险管理与经营效率的内在关联,并以中国保险业为例,对1999年以来企业真实的经营效率水平进行了评估。结果表明:企业内部的风险管理能力对其经营效率水平的提升具有明显的影响,而且这种影响力正在逐渐加强。不考虑企业内部的风险管理水平将直接导致其经营效率的测算结果出现低估,2002年以后这种低估的程度越发明显,这可归因于同期保险企业开始逐渐重视提高自身的风险管理能力。以上结论也为企业如何在管控风险的同时提升经营效率水平提供了有价值的指导。     

Beyond Make‐Buy: Internalization and Integration of Design and Production

Much recent attention in industrial practice has been centered on the question of which activities a manufacturing firm should complete for itself and for which it should rely on outside suppliers. This issue, generally labeled the “make‐buy” decision, has received substantial theoretical and empirical attention. In this paper, we broaden the scope of the make‐buy decision to include product design decisions, as well as production decisions. First, we examine independently the decisions of whether to internalize design and production, and then we consider how design and production organizational decisions are interdependent. The specific research questions we address are: (1) How can design and production sourcing decisions be described in richer terms than “make” and “buy”? (2) Do existing theories of vertical integration apply to product design activities as well as production decisions? (3) What is the relationship between the organization of design and the organization of production? (4) What organizational forms for design and production are seen in practice? After developing theoretical arguments and a conceptual framework, we explore these ideas empirically through an analysis of design and production sourcing decisions for bicycle frames in the U. S. mountain bicycle industry.     

Threshold Incentives and Sales Variance

In this paper, we analyze the impact of two forms of commonly used threshold‐based incentive schemes on the observed sales variability. The first form of the incentive comprises an additional marginal payment on crossing a specified sales threshold and the second form of the incentive scheme comprises a lumpsum bonus payment on crossing the predetermined sales threshold. We model the effect of such incentives under two specific scenarios: an exclusive dealership selling a single product and a non‐exclusive dealer selling two competing products. For an exclusive dealer, we show that a bonus contract not only increases the expected sales, but, more importantly, decreases the sales (order) variance. Consequently, the bonus‐based scheme allows the manufacturer to regulate sales variance better. With a non‐exclusive dealer, the sales variance increases substantially with an additional marginal payment contract. However, our analysis suggests that the bonus contract continues to perform better in this case, too, if the threshold level is set appropriately using the underlying demand distribution.     

具有独立子系统的DEA模型及其应用

考虑到现有的DEA模型基本都是针对单系统的,而仅有的多系统模型[10]也是在假设决策单元相互独立并且不存在规模收益的条件下给出的,本文首先建立了3个评价具有独立子系统的决策单元相对有效性的DEA模型,即假设存在规模收益的模型(1),允许存在组内合作的模型(2),组内与组间都可以进行合作的模型(3),并通过分析3个模型之间的关系得到了决策单元通过组内或者组间合作带来的收益,同时证明了模型的一些性质以及决策单元相对有效与子系统相对有效之间的关系,进而应用这3个模型对1997年我国制造业的东、西、中三个区域的域内以及域间合作问题作了研究.结果表明:本文建立的模型不仅可以得到不同省市制造业的整体效率,而且还可以得到各省市制造业的不同行业的效率以及通过域内或域间合作带来的收益,从而得到运作和管理效率低下的根本原因.     

Enhancing standard performance practices with DEA

Data envelopment analysis (DEA) can be interpreted as a natural generalization of elemental practices for efficiency and performance evaluation used in diverse areas, some of which have evolved independently of each other and of the traditional efficiency framework of Charnes et al. [Measuring the efficiency of decision making units. European Journal of Operational Research 1978;2(6):429–44]. The paper aims to show that some standard “real-world” procedures employed by practitioners in the fields of retailing, finance, and social science can be interpreted as unconscious applications of DEA, and that such analyses could be enhanced by the explicit use of DEA. A supplementary aim is to demonstrate that DEA can be derived from concrete examples and first principles. The choice of the examples covers the two typical returns to scale environments of constant returns to scale (CRS) and variable returns to scale (VRS). Motivating and deriving DEA as a generalization of established performance evaluation practices will help to explain and disseminate this methodology to practitioners and to those who find their methods familiar.     

Internal resource waste and centralization degree in two-stage systems: An efficiency analysis

Internal resource waste refers to the waste in the intermediate resources between the upstream stage and downstream stage in a production or service system. This study examines a system with a two-stage structure, in which the outputs from the first stage are taken as the inputs for the second stage. Two-stage systems can exist in centralized, decentralized, or mixed organizational modes. In this paper, we propose two-stage DEA models considering a degree of centralization that makes it possible to measure internal resource waste in different system modes. Some managerial insights are tested and verified from the perspective of efficiency analysis. We find that: 1) when there is only one intermediate measure in a centralized two-stage system, internal resource waste can be eliminated completely, and 2) a higher degree of centralization in a two-stage system can lead to less internal resource waste and more expected outputs. Finally, we present a numerical example and two practical real-world examples that illustrate our approach and findings.     

Research fronts in data envelopment analysis

Research activities relating to data envelopment analysis (DEA) have grown at a fast rate recently. Exactly what activities have been carrying the research momentum forward is a question of particular interest to the research community. The purpose of this study is to find these research activities, or research fronts, in DEA. A research front refers to a coherent topic or issue addressed by a group of research articles in recent years. The large amount of DEA literature makes it difficult to use any traditional qualitative methodology to sort out the matter. Thus, this study applies a network clustering method to group the literature through a citation network established from the DEA literature over the period 2000 to 2014. The keywords of the articles in each discovered group help pinpoint its research focus. The four research fronts identified are “bootstrapping and two-stage analysis”, “undesirable factors”, “cross-efficiency and ranking”, and “network DEA, dynamic DEA, and SBM”. Each research front is then examined with key-route main path analysis to uncover the elements in its core. In addition to presenting the research fronts, this study also updates the main paths and author statistics of DEA development since its inception and compares them with those reported in a previous study.     

Replenishment Strategies for Micro‐Retailers in Developing Countries

When formal distribution channels are absent in developing countries, micro‐retailers travel a long distance to replenish their stocks directly from suppliers. This “informal” replenishment strategy is inefficient due to high imputed travel costs involved in the replenishment process. To improve efficiency, one “hybrid” replenishment strategy has emerged under which one of the micro‐retailers in a neighborhood, while continuing its own retail business, also operates as a wholesaler to serve other micro‐retailers in the neighborhood. A major obstacle for the transition from the informal strategy to the hybrid strategy is that the micro‐retailers are reluctant to source from a wholesaler who also competes with them in the retail market. Thus, it is not clear when the micro‐retailers adopt the hybrid strategy instead of the informal strategy. Meanwhile, the micro‐retailers may prefer the “formal” strategy: a traditional replenishment strategy under which one of the micro‐retailers relinquishes its retail business and operates purely as a wholesaler. We examine a situation when competing micro‐retailers contemplate with the three potential aforementioned replenishment strategies. Our equilibrium analysis of the two‐store model reveals that the dominant strategy is: (a) the hybrid strategy when the travel cost is high; (b) the formal strategy when the travel cost is medium; and (c) the informal strategy when the travel cost is low. This key insight is shown continue to hold when we extend the two‐store model to incorporate other issues including: quantity discounts from the supplier, variable operating costs, price competition, local monopolies, and different decision sequences. One additional finding is that the transition from the informal strategy to the hybrid strategy could benefit consumers if the micro‐retailers receive quantity discounts from the supplier. Furthermore, when there are more than two stores, we show that the formal strategy is never dominant. Moreover, when the number of stores increases, the hybrid strategy becomes more preferable to the informal strategy.     

Manufacturing Practices and Strategy Integration: Effects on Cost Efficiency,Flexibility, and Market‐Based Performance

Manufacturing plant managers have sought performance improvements through implementing best practices discussed in World Class Manufacturing literature. However, our collective understanding of linkages between practices and performance remains incomplete. This study seeks a more complete theory, advancing the idea that strategy integration and enhanced manufacturing capabilities such as cost efficiency and flexibility serve as intermediaries by which practices affect performance. Hypotheses related to this thesis are tested using data from 57 North American manufacturing plants that are past winners and finalists in Industry Week's“America's Best” competition ( Drickhamer, 2001 ). The results suggest that strategy integration plays a strong, central role in the creation of manufacturing cost efficiency and new product flexibility capabilities. Furthermore, strategy integration moderates the influences of product‐process development, supplier relationship management, workforce development, just‐in‐time flow, and process quality management practices on certain manufacturing capabilities. In turn, manufacturing cost efficiency and new product flexibility capabilities mediate the influence of strategy integration on market‐based performance. These findings have implications for practice and for future research.     

智联产品服务供应链研发运维多阶段联合优化与协调

在智联化和服务化背景下,智能产品服务系统成为制造企业转型升级的重要方向。产品的“智能”和“互联”特性给供应链中的产品和服务都带来了新的变化。考虑产品的“智能”和“互联”对产品、服务的需求和成本的影响,构建了供应链两阶段动态博弈模型。刻画了分散决策和集中决策下供应链的最优运作行为,基于产品收益和服务收益提出了“双元收益共享”的供应链协调机制。通过算例分析,探讨了“服务化”、“智能互联”与“双元收益共享”契约对供应链利润的影响。研究表明,智联产品供应链中融入智能服务,不总是能增加供应链利润,存在“服务化悖论”;当产品智联化后,智能互联特性加强了产品与服务的融合,使供应链各方的利润都有较大提高;“双元收益共享”契约不仅能实现供应链Pareto改进,还能提高消费者剩余。     

基于企业转型目标的产品组合策略选择模型

在产业升级的背景下，企业面临转型的机遇和任务。当前企业转型的经济转化能力较弱，其主要原因是企业忽略了转型目标与产品组合策略相匹配的重要作用。本文提出转型目标一致性的概念来衡量产品组合策略与转型目标的匹配程度，基于模糊DEA方法构建了基于转型目标一致的产品组合策略选择模型。以产业相关转型的企业为对象进行实例分析，验证了模型的可操作性。具有转型目标一致性的产品组合策略更能满足企业转型发展的需要，创造更好的经济和社会效益。模型为企业成功转型和制定相应的产品组合策略提供了指导意见。