TY - JOUR
T1 - Decomposition of technical and scale efficiencies in two-stage production systems
AU - Kao, Chiang
AU - Hwang, Shiuh Nan
N1 - Funding Information:
This research was supported by the National Science Council, Republic of China (Taiwan) , under Grant No. NSC98-2410-H-006-006-MY3 . The authors are also grateful to the comments and suggestions of the four anonymous reviewers.
PY - 2011/6/16
Y1 - 2011/6/16
N2 - Conventional data envelopment analysis (DEA) models are used to measure the technical and scale efficiencies of a system when it is considered as a whole unit. This paper extends the efficiency measurement to two-stage systems where each stage has one process and all the outputs from the first process become the inputs of the second. An input-oriented DEA model for the first process is developed to separate the process efficiency into the input technical and scale efficiencies, and an output-oriented model is developed for the second process to separate the process efficiency into the output technical and scale efficiencies. Combining the two models, the system efficiency is expressed as the product of the overall technical and scale efficiencies, where the overall technical and scale efficiencies are the products of the corresponding efficiencies of the two processes, respectively. The detailed decomposition allows the sources of inefficiency to be identified.
AB - Conventional data envelopment analysis (DEA) models are used to measure the technical and scale efficiencies of a system when it is considered as a whole unit. This paper extends the efficiency measurement to two-stage systems where each stage has one process and all the outputs from the first process become the inputs of the second. An input-oriented DEA model for the first process is developed to separate the process efficiency into the input technical and scale efficiencies, and an output-oriented model is developed for the second process to separate the process efficiency into the output technical and scale efficiencies. Combining the two models, the system efficiency is expressed as the product of the overall technical and scale efficiencies, where the overall technical and scale efficiencies are the products of the corresponding efficiencies of the two processes, respectively. The detailed decomposition allows the sources of inefficiency to be identified.
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U2 - 10.1016/j.ejor.2011.01.010
DO - 10.1016/j.ejor.2011.01.010
M3 - Article
AN - SCOPUS:79952186823
SN - 0377-2217
VL - 211
SP - 515
EP - 519
JO - European Journal of Operational Research
JF - European Journal of Operational Research
IS - 3
ER -