Economies of scope in two-stage production systems: A data envelopment analysis approach

2018 ◽  
Vol 52 (2) ◽  
pp. 335-349 ◽  
Author(s):  
Leila Zeinalzadeh Ahranjani ◽  
Reza Kazemi Matin ◽  
Reza Farzipoor Saen
Keyword(s):  
Data Envelopment Analysis ◽  
Production Systems ◽  
Efficiency Score ◽  
Joint Production ◽  
Economies Of Scope ◽  
Data Envelopment ◽  
Two Stage ◽  
Network Dea ◽  
Second Stage ◽  
Dea Models

Traditional data envelopment analysis (DEA) models consider a production system as a black-box without taking into consideration its internal linked activities. In recent years, a number of DEA studies have been presented to estimate efficiency score of two-stage network production systems in which all outputs of the first stage (intermediate products) are used as inputs of the second stage to produce final outputs. This paper aims to develop a two-stage network DEA model to study economic notion of economies of scope (ES) between two products. It intends to determine profitability of joint production of two products by one firm. Numerical illustrations are presented to show applicability of proposed methods.

scholarly journals Efficiency Bounds for Two-Stage Production Systems

2018 ◽  
Vol 2018 ◽  
pp. 1-9 ◽  
Author(s):  
Xiao Shi
Keyword(s):  
Production Systems ◽  
Efficiency Score ◽  
Insurance Companies ◽  
Practical Case ◽  
Data Envelopment ◽  
Production Structure ◽  
Two Stage ◽  
Decision Making Unit ◽  
Real World Applications ◽  
Dea Models

Traditional data envelopment analysis (DEA) models find the most desirable weights for each decision-making unit (DMU) in order to estimate the highest efficiency score as possible. These efficiency scores are then used for ranking the DMUs. The main drawback is that the efficiency scores based on weights obtained from the standard DEA models ignore other feasible weights; this is due to the fact that DEA may have multiple solutions for each DMU. To overcome this problem, Salo and Punkka (2011) deemed each DMU as a “Black Box” and developed models to obtain the efficiency bounds for each DMU over sets of all its feasible weights. In many real world applications, there are DMUs that have a two-stage production system. In this paper, we extend the Salo and Punkka’s (2011) model to a more common and practical case considering the two-stage production structure. The proposed approach calculates each DMU’s efficiency bounds for the overall system as well as efficiency bounds for each subsystem/substage. An application for nonlife insurance companies has been discussed to illustrate the applicability of the proposed approach and show the usefulness of this method.

scholarly journals Group ranking of two-stage production units in network data envelopment analysis

2021 ◽  
Author(s):  
Mohammad Sajjad Shahbazifar ◽  
Reza Kazemi Matin ◽  
Mohsen Khounsiavash ◽  
Fereshteh Koushki
Keyword(s):  
Data Envelopment Analysis ◽  
Group Performance ◽  
Production Systems ◽  
Performance Criteria ◽  
Data Envelopment ◽  
Mathematical Tool ◽  
Two Stage ◽  
Group Ranking ◽  
Group Efficiency ◽  
Dea Models

Data envelopment analysis (DEA) is a useful mathematical tool for evaluating the performance of production units and ranking their relative efficiency. In many real-world applications, production units belong to several separate groups and also consist of several sub-units. In this paper, we introduce a new method of evaluating group efficiency of two-stage production systems. To this end, some new DEA models are introduced for evaluating and ranking groups of production systems based on the average and weakest group performance criteria. Some numerical examples, including an empirical application in the banking industry, are also provided for illustration.

Two-Stage Data Envelopment Analysis Efficiency of Indian General Insurance Companies

2021 ◽  
pp. 097215092110476
Author(s):  
Ram Pratap Sinha
Keyword(s):  
Data Envelopment Analysis ◽  
Asset Management ◽  
Evaluation Model ◽  
Insurance Companies ◽  
Data Envelopment ◽  
Efficiency Evaluation ◽  
Two Stage ◽  
Network Dea ◽  
Second Stage ◽  
General Insurance

The present study compares efficiency-related performance of 15 Indian general insurance companies using a two-stage efficiency evaluation model. Efficiency evaluation has been made for the span 2009–2010 to 2017–2018 using network DEA (data envelopment analysis). The results indicate that the in-sample private sector general insurance companies outcompeted the public sector insurers with regard to first-stage activity (premium mobilization), while the reverse was observed in terms of the second-stage activity (asset management and provision of claim benefits). The study also carried out regression of efficiency scores on several contextual variables. The results indicate that ownership is an influential contextual variable in both stages of productivity while solvency significantly impacts efficiency in the second stage.

Measuring Performance of a Three-Stage Network Structure Using Data Envelopment Analysis and Nash Bargaining Game: A Supply Chain Application

2018 ◽  
Vol 17 (05) ◽  
pp. 1429-1467 ◽  
Author(s):  
Mohammad Amirkhan ◽  
Hosein Didehkhani ◽  
Kaveh Khalili-Damghani ◽  
Ashkan Hafezalkotob
Keyword(s):  
Supply Chain ◽  
Data Envelopment Analysis ◽  
Nash Bargaining ◽  
Data Envelopment ◽  
Second Stage ◽  
Proposed Model ◽  
Nash Bargaining Game ◽  
Dea Models ◽  
Overall Efficiency

The issue of efficiency analysis of network and multi-stage systems, as one of the most interesting fields in data envelopment analysis (DEA), has attracted much attention in recent years. A pure serial three-stage (PSTS) process is a specific kind of network in which all the outputs of the first stage are used as the only inputs in the second stage and in addition, all the outputs of the second stage are applied as the only inputs in the third stage. In this paper, a new three-stage DEA model is developed using the concept of three-player Nash bargaining game for PSTS processes. In this model, all of the stages cooperate together to improve the overall efficiency of main decision-making unit (DMU). In contrast to the centralized DEA models, the proposed model of this study provides a unique and fair decomposition of the overall efficiency among all three stages and eliminates probable confusion of centralized models for decomposing the overall efficiency score. Some theoretical aspects of proposed model, including convexity and compactness of feasible region, are discussed. Since the proposed bargaining model is a nonlinear mathematical programming, a heuristic linearization approach is also provided. A numerical example and a real-life case study in supply chain are provided to check the efficacy and applicability of the proposed model. The results of proposed model on both numerical example and real case study are compared with those of existing centralized DEA models in the literature. The comparison reveals the efficacy and suitability of proposed model while the pitfalls of centralized DEA model are also resolved. A comprehensive sensitivity analysis is also conducted on the breakdown point associated with each stage.

Benchmarking the efficiencies of Indonesia’s municipal water utilities using Stackelberg data envelopment analysis

2015 ◽  
Vol 22 (4) ◽  
pp. 588-609 ◽  
Author(s):  
Andreas Wibowo ◽  
Hans Wilhelm Alfen
Keyword(s):  
Data Envelopment Analysis ◽  
The Body ◽  
Water Utilities ◽  
Data Envelopment ◽  
Two Stage ◽  
Restrictive Assumption ◽  
Content Type ◽  
Second Stage ◽  
Municipal Water ◽  
The Impact

Purpose – The purpose of this paper is to present a yardstick efficiency comparison of 269 Indonesian municipal water utilities (MWUs) and measures the impact of exogenous environmental variables on efficiency scores. Design/methodology/approach – Two-stage Stackelberg leader-follower data envelopment analysis (DEA) and artificial neural networks (ANN) were employed. Findings – Given that serviceability was treated as the leader and profitability as the follower, the first and second stage DEA scores were 55 and 32 percent (0 percent = totally inefficient, 100 percent = perfectly efficient), respectively. This indicates sizeable opportunities for improvement, with 39 percent of the total sample facing serious problems in both first- and second-stage efficiencies. When profitability instead leads serviceability, this results in more decreased efficiency. The size of the population served was the most important exogenous environmental variable affecting DEA efficiency scores in both the first and second stages. Research limitations/implications – The present study was limited by the overly restrictive assumption that all MWUs operate at a constant-return-to-scale. Practical implications – These research findings will enable better management of the MWUs in question, allowing their current level of performance to be objectively compared with that of their peers, both in terms of scale and area of operation. These findings will also help the government prioritize assistance measures for MWUs that are suffering from acute performance gaps, and to devise a strategic national plan to revitalize Indonesia’s water sector. Originality/value – This paper enriches the body of knowledge by filling in knowledge gaps relating to benchmarking in Indonesia’s water industry, as well as in the application of ensemble two-stage DEA and ANN, which are still rare in the literature.

scholarly journals Data envelopment analysis in measuring the efficiency of volleyball teams in Primorsko-Goranska County

2020 ◽  
Vol 8 (1) ◽  
pp. 121-134
Author(s):  
Jelena Jardas Antonić ◽  
Kristina Kregar ◽  
Nenad Vretenar
Keyword(s):  
Data Envelopment Analysis ◽  
Efficiency Analysis ◽  
Efficiency Score ◽  
Financial Resources ◽  
Data Envelopment ◽  
Financial Factors ◽  
Measuring Efficiency ◽  
Dea Models ◽  
Sport Organisation ◽  
Ccr Model

Every sport organisation strives to evaluate its performance: its weaknesses and strengths. Measuring efficiency and sports are two interrelated concepts and it is not surprising that most of the research on sports is focused on analysing the efficiency of teams according to player techniques, attack and defence efficiency. However, there are very few studies based on the analysis of financial factors such as teams’ revenue and costs. In this paper two Data Envelopment Analysis (DEA) models were used to evaluate 16 young cadet volleyball teams in Primorsko-Goranska County based on two economic inputs. The paper aims to explain the importance of teams’ financial resources in achieving sports efficiency. To analyse the relative efficiency of teams, two frequently used models are employed, the Banker Charnes Cooper (BCC) and the Charnes Cooper Rhodes (CCR) model. In the end, a super efficiency analysis was conducted to make a distinction in efficiency scores between efficient units. Analyses showed that financial factors are not crucial factors for efficiency score and gave possibility to use obtained results and improve the performance of inefficient volleyball teams. The study was conducted on a sample of 16 teams through 4 inputs and 1 output collected during 2017/2018 season.

scholarly journals Alternative Secondary Goals in Multiplicative Two-Stage Data Envelopment Analysis

2021 ◽  
Vol 2021 ◽  
pp. 1-11
Author(s):  
Chao Lu ◽  
Haifang Cheng
Keyword(s):  
Data Envelopment Analysis ◽  
Relative Efficiency ◽  
Data Envelopment ◽  
Nonparametric Method ◽  
Two Stage ◽  
Dea Model ◽  
Second Stage ◽  
China Construction Bank ◽  
Overall Efficiency ◽  
Decision Making Units

Data envelopment analysis (DEA) is a nonparametric method for evaluating the relative efficiency of a set of decision-making units (DMUs) with multiple inputs and outputs. As an extension of the DEA, a multiplicative two-stage DEA model has been widely used to measure the efficiencies of two-stage systems, where the first stage uses inputs to produce the outputs, and the second stage then uses the first-stage outputs as inputs to generate its own outputs. The main deficiency of the multiplicative two-stage DEA model is that the decomposition of the overall efficiency may not be unique because of the presence of alternate optima. To remove the problem of the flexible decomposition, in this paper, we maximize the sum of the two-stage efficiencies and simultaneously maximize the two-stage efficiencies as secondary goals in the multiplicative two-stage DEA model to select the decomposition of the overall efficiency from the flexible decompositions, respectively. The proposed models are applied to evaluate the performance of 10 branches of China Construction Bank, and the results are compared with the results of the existing models.

scholarly journals Designing an Intuitionistic Fuzzy Network Data Envelopment Analysis Model for Efficiency Evaluation of Decision-Making Units with Two-Stage Structures

2021 ◽  
Vol 2021 ◽  
pp. 1-15
Author(s):  
Nafiseh Javaherian ◽  
Ali Hamzehee ◽  
Hossein Sayyadi Tooranloo
Keyword(s):  
Decision Making ◽  
Data Envelopment Analysis ◽  
Data Envelopment Analysis Model ◽  
Data Envelopment ◽  
Analysis Model ◽  
Two Stage ◽  
Intuitionistic Fuzzy Numbers ◽  
Intuitionistic Fuzzy ◽  
Dea Models ◽  
Decision Making Units

Data envelopment analysis (DEA) is a powerful tool for evaluating the efficiency of decision-making units for ranking and comparison purposes and to differentiate efficient and inefficient units. Classic DEA models are ill-suited for the problems where decision-making units consist of multiple stages with intermediate products and those where inputs and outputs are imprecise or nondeterministic, which is not uncommon in the real world. This paper presents a new DEA model for evaluating the efficiency of decision-making units with two-stage structures and triangular intuitionistic fuzzy data. The paper first introduces two-stage DEA models, then explains how these models can be modified with intuitionistic fuzzy coefficients, and finally describes how arithmetic operators for intuitionistic fuzzy numbers can be used for a conversion into crisp two-stage structures. In the end, the proposed method is used to solve an illustrative numerical example.

scholarly journals Centralized resource allocation with the possibility of downsizing in two-stage network production systems

2021 ◽  
Author(s):  
Amir Hossein Yadollahi ◽  
Reza Kazemi Matin
Keyword(s):  
Resource Allocation ◽  
Resource Constraints ◽  
Production Systems ◽  
Data Envelopment ◽  
Two Stage ◽  
New Approach ◽  
Organizational Perspective ◽  
Dea Models ◽  
Common Resource ◽  
Component Processes

The network data envelopment analysis (NDEA) technique has been recently developed to measure the relative efficiency of complex production systems. NDEA models provide more meaningful and informative results in comparison to the conventional black-box DEA approach that ignores the operations of the component processes. Regarding the centralized decision-making systems, normal management imposes common resource constraints to maximize produced outputs and minimize consumed inputs. The present study seeks to introduce new centralized resource allocation models in two-stage network production systems. This intra-organizational perspective also provides the possibility of closing down some of the existing units to improve system efficiency. To do so, three scenarios of centralized DEA models are introduced to take advantage of this possibility. A simple numerical example is used for illustration purposes. An empirical application of the proposed approach to the twenty branches of a university is also presented to show the applicability of the new approach.

A slacks-based measure approach for efficiency decomposition in multi-period two-stage systems

2020 ◽  
Vol 54 (6) ◽  
pp. 1657-1671
Author(s):  
Samaneh Esfidani ◽  
Farhad Hosseinzadeh Lotfi ◽  
Shabnam Razavyan ◽  
Ali Ebrahimnejad
Keyword(s):  
Production Systems ◽  
Weighted Average ◽  
Real Data ◽  
Stage Structure ◽  
Data Envelopment ◽  
Two Stage ◽  
Bank Branches ◽  
Proposed Model ◽  
Efficiency Decomposition ◽  
Dea Models

Two-stage production systems are often encountered in many real applications where the production process is divided into two processes. In contrast to the conventional data envelopment analysis (DEA) models, two-stage DEA models take the operations of the internal processes into account. A number of studies have used two-stage DEA models in order to evaluate the performance of decision making units (DMUs) having a network structure. In this paper, we use a non-radial DEA model called the network slacks-based measure (NSBM) model to measure the efficiency of a system with a multi-period two-stage structure. Then we describe the properties of the proposed model in details. Moreover, we shall decompose the overall efficiency of the system over a number of time periods as a weighted average of the efficiency in each period. The efficiency of the stages, in respect to the entire periods shall be decomposed in terms of the weighted average efficiency of the stages in each period. Finally, the real data of Mellat bank branches in Tehran extracted from extant literature is used to illustrate the proposed approach.

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