Evaluation of the Dynamic Performance of Banking Industry Using NDEA in the Presence of Undesirable Intertemporal Intermediate Products (Case study: Tejarat Bank)

Subject Areas : International Journal of Mathematical Modelling & Computations

Mohammad Reza Razmkhah ¹ , Amin Mostafaee ² , Saber Saati ³ , Maryam Shoar ⁴

1 - Department of Industrial Management, North Tehran Branch, Islamic Azad University, Tehran, Iran.
2 - Department of Mathematics, North Tehran Branch, Islamic Azad University, Tehran, Iran.
3 - Department of Mathematics, North Tehran Branch, Islamic Azad University, Tehran, Iran.
4 - Department of Mathematics, North Tehran Branch, Islamic Azad University, Tehran, Iran.

Received: 2024-08-29 Accepted : 2024-11-30 Published : 2024-12-12

Keywords: Efficiency, Network Data envelopment analysis, Slack based measure, Banking industry.,

Abstract :

Performance evaluation has become an unavoidable necessity for the long-term survival of organizations. In particular, efficiency measurement plays a central role in performance evaluation. The banking industry is considered as one of the most important economic sectors, and hence, one of the most important challenges in efficiency evaluation using Data Envelopment Analysis (DEA) is the selection of input-output factors. Since banking industry have complex and multi-stage process, traditional models that follow a simple black box structure cannot be used to evaluate the efficiency of banks. This study develops a slack based method for evaluating the dynamic efficiencies of banks with a network structure. The main aim of this study is to develop a dynamic two-stage DEA model for evaluating the efficiencies of 55 Tejarat bank branches in the presence of undesirable intertemporal intermediates. The results show that the proposed model measures the overall and stage efficiencies more accurately and reveals the source of branch inefficiency. The presented model can be developed straightforwardly to other network structures and applications.

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