Profit Efficiency Evaluation: A composed Approach of DEA and multi- objective programming
محورهای موضوعی : Operation Research
Soheila Seyedboveir
1
,
Fatemeh Mehregan
2
,
Mahnaz Maghbouli
3
1 - Islamc Azad University, Abadan Branch, Abadan, Ira
2 - Islamic Azad University, Abadan Branch, Abadan, Iran
3 - Islamic Azad University, Aras Branch, Jolfa, Iran
کلید واژه:
چکیده مقاله :
Data envelopment analysis (DEA) is a nonparametric method for evaluating the relative efficiency of decision making units (DMUs) described by multiple inputs and multiple outputs. The issue of measuring the cost, revenue and profit efficiency in manufacturing and economic systems is one of the most challenging issues for managers. This research, is an attempt to apply Data envelopment analysis and multi-objective programming in order to evaluate the profit efficiency of DMUs with the perspective of employment in banking sector. In order to address the issue, the proposed model employed the current values of cost and revenue efficiency in a way not only the cost and revenue scores are as close as possible to their best scores but also as far as possible from their worst values. In this case, the evaluated profit efficiency is fairer than compared with the existing methods. Furthermore, the proposed method can distinguish the differences of units which was evaluated as profit- efficient with the standard evaluation and may open some avenues to resolve the inefficiency sources. To illustrate the applicability of the proposed method a real case of Iranian bank was explored
Data envelopment analysis (DEA) is a nonparametric method for evaluating the relative efficiency of decision making units (DMUs) described by multiple inputs and multiple outputs. The issue of measuring the cost, revenue and profit efficiency in manufacturing and economic systems is one of the most challenging issues for managers. This research, is an attempt to apply Data envelopment analysis and multi-objective programming in order to evaluate the profit efficiency of DMUs with the perspective of employment in banking sector. In order to address the issue, the proposed model employed the current values of cost and revenue efficiency in a way not only the cost and revenue scores are as close as possible to their best scores but also as far as possible from their worst values. In this case, the evaluated profit efficiency is fairer than compared with the existing methods. Furthermore, the proposed method can distinguish the differences of units which was evaluated as profit- efficient with the standard evaluation and may open some avenues to resolve the inefficiency sources. To illustrate the applicability of the proposed method a real case of Iranian bank was explored
[1] AMIRTEIMOORI , A., KORDROSTAMI, S. & REZAITABAR, A. (2006). An improvement to the cost efficiency interval: A DEA based approach. Applied mathematics and computation, 181,775-781.
[2] APARICIO, J. BORRAS, F. & , PASTOR, J.T., VIDAL, F. (2013). Accounting for slacks to measure and decompose revenue efficiency in the Spanish Designation of Origin wines with DEA. European Journal of Operational Research, 231,443-451.
[3] CAMANHO, A.S. & DYSON, R.G. (2005). Cost efficiency measurement with price uncertainty: a DEA application to bank branch assessments. European journal of operational Research, 161,432-446.
[4] FARELL, M.J. (1957) . The measurement of productive efficiency. Journal of the Royal Statistical Society (Series A) 129, 253-351.
[5] FARE, R., GROSSKOPF.S. & LOVELL, C.A.K. (1985). The measurement of efficiency of production. Boston: Kluwer Publication.
[6] FARE, R., GROSSKOPF.S. & LOVELL, C.A.K (1994). Production Frontiers. Cambridge University Press. Southern Illinois University, Carbondale.
[7] FARE, R., GROSSKOPF.S. & WEBER, W. (2004). The effect of Risk-based capital requirements on profit efficiency in banking. Applied Economics, 36, 1731-1743.
[8] FUKUYAMA, H., & MATOUSEK, R. (2017). Modeling bank performance: A network DEA approach. European Journal of Operational Research, 259, pp 721-732.
[9] FUKUYAMA H. & WEBER, W. L. (2008) . Profit inefficiency of Japanese securities firms. Journal of Applied Economics, 11, 281-303.
[10] JAHANSHAHLOO, G.R. SOLEIMANI- DAMANEH, M., MOSTAFAEE, A. (2008). A simplified version of the DEA cost efficiency model. European Journal of Operational Research. 184, 814-815.
[11] JAHANSHAHLOO, G.R. MIRDEHGAN, S.M., VAKILI. J. (2011). an interpretation of the cost model in Data Envelopment Analysis. Journal of Applied Sciences, 11(2) , 389-392.
[12] MOGHADDAS, Z & VAEZ GHASEMI, M. (2022). Revenue Efficiency Evaluation in a Two-Stage Network with Nonlinear Prices in Data Envelopment Analysis. Journal of Decisions and Operations Research, 6, 1–9.
[13] PARK, K.S.M., & CHO J.W. (2011). Pro-efficiency: Data speak more than technical efficiency. European Journal of Operational Research, 215, 301-308.
[14] PORTELA, M.C.A.S. &, THANASSOULIS , E. (2007). Developing a decomposable measure of profit efficiency using DEA. Journal of the Operational Research Society, 58, 481-490.
[15] TOLOO, M. & ERTAY, T. (2014) . The most cost efficient automotive vendor with price uncertainty: A new DEA approach. Measurement, 52,135-144.
