New insights on measuring bank branches efficiency through DEA:transactional, operational, and profit assessments

This thesis presents a number of methodological developments that were raised by a real life application to measuring the efficiency of bank branches. The advent of internet banking and phone banking is changing the role of bank branches from a predominantly transaction-based one to a sales-oriented role. This fact requires the development of new forms of assessing and comparing branches of a bank. In addition, performance assessment models must also take into account the fact that bank branches are service and for-profit organisations to which providing adequate service quality as well as being profitable are crucial objectives. This study analyses bank branches performance in their new roles in three different areas: their effectiveness in fostering the use of new transaction channels such as the internet and the telephone (transactional efficiency); their effectiveness in increasing sales and their customer base (operational efficiency); and their effectiveness in generating profits without compromising the quality of service (profit efficiency). The chosen methodology for the overall analysis is Data Envelopment Analysis (DEA). The application attempted here required some adaptations to existing DEA models and indeed some new models so that some specialities of our data could be handled. These concern the development of models that can account for negative data, the development of models to measure profit efficiency, and the development of models that yield production units with targets that are nearer to their observed levels than targets yielded by traditional DEA models. The application of the developed models to a sample of Portuguese bank branches allowed their classification according to the three performance dimensions (transactional, operational and profit efficiency). It also provided useful insights to bank managers regarding how bank branches compare between themselves in terms of their performance, and how, in general, the three performance dimensions are connected between themselves.

Using RFID-RTE to increase efficiency in the supply chain

This paper aims to explore the application of Radio Frequency Identification (RFID) to Returnable transit equipment (RTE) in the supply chain. Particular attention is applied to the current structures of RTE networks as formulated by RTE providers. The problems related to RTE usage are described and the effect to the network analyzed. RFID is investigated as a tool to assist with the movement of the RTE both from the client’s and RTE provider’s point of view.

Evaluating productive efficiency:comparative study of commercial banks in Gulf countries

Financial institutes are an integral part of any modern economy. In the 1970s and 1980s, Gulf Cooperation Council (GCC) countries made significant progress in financial deepening and in building a modern financial infrastructure. This study aims to evaluate the performance (efficiency) of financial institutes (banking sector) in GCC countries. Since, the selected variables include negative data for some banks and positive for others, and the available evaluation methods are not helpful in this case, so we developed a Semi Oriented Radial Model to perform this evaluation. Furthermore, since the SORM evaluation result provides a limited information for any decision maker (bankers, investors, etc...), we proposed a second stage analysis using classification and regression (C&R) method to get further results combining SORM results with other environmental data (Financial, economical and political) to set rules for the efficient banks, hence, the results will be useful for bankers in order to improve their bank performance and to the investors, maximize their returns. Mainly there are two approaches to evaluate the performance of Decision Making Units (DMUs), under each of them there are different methods with different assumptions. Parametric approach is based on the econometric regression theory and nonparametric approach is based on a mathematical linear programming theory. Under the nonparametric approaches, there are two methods: Data Envelopment Analysis (DEA) and Free Disposal Hull (FDH). While there are three methods under the parametric approach: Stochastic Frontier Analysis (SFA); Thick Frontier Analysis (TFA) and Distribution-Free Analysis (DFA). The result shows that DEA and SFA are the most applicable methods in banking sector, but DEA is seem to be most popular between researchers. However DEA as SFA still facing many challenges, one of these challenges is how to deal with negative data, since it requires the assumption that all the input and output values are non-negative, while in many applications negative outputs could appear e.g. losses in contrast with profit. Although there are few developed Models under DEA to deal with negative data but we believe that each of them has it is own limitations, therefore we developed a Semi-Oriented-Radial-Model (SORM) that could handle the negativity issue in DEA. The application result using SORM shows that the overall performance of GCC banking is relatively high (85.6%). Although, the efficiency score is fluctuated over the study period (1998-2007) due to the second Gulf War and to the international financial crisis, but still higher than the efficiency score of their counterpart in other countries. Banks operating in Saudi Arabia seem to be the highest efficient banks followed by UAE, Omani and Bahraini banks, while banks operating in Qatar and Kuwait seem to be the lowest efficient banks; this is because these two countries are the most affected country in the second Gulf War. Also, the result shows that there is no statistical relationship between the operating style (Islamic or Conventional) and bank efficiency. Even though there is no statistical differences due to the operational style, but Islamic bank seem to be more efficient than the Conventional bank, since on average their efficiency score is 86.33% compare to 85.38% for Conventional banks. Furthermore, the Islamic banks seem to be more affected by the political crisis (second Gulf War), whereas Conventional banks seem to be more affected by the financial crisis.

Measuring productive efficiency using Nerlovian profit efficiency indicator and metafrontier analysis

The aim of this paper is to illustrate the measurement of productive efficiency using Nerlovian indicator and metafrontier with data envelopment analysis techniques. Further, we illustrate how profit efficiency of firms operating in different regions can be aggregated into one overarching frontier. Sugarcane production in three regions in Kenya has been used to illustrate these concepts. Results show that the sources of inefficiency in all regions are both technical and allocative, but allocative efficiency contributes more to the overall Nerlovian (in)efficiency indicator. © 2011 Springer-Verlag.

Can computer-based testing achieve quality and efficiency in assessment?

This paper reports findings of a two year study concerning the development and implementation of a general-purpose computer-based assessment (CBA) system at a UK University. Data gathering took place over a period of nineteen months, involving a number of formative and summative assessments. Approximately 1,000 students, drawn from undergraduate courses, were involved in the exercise. The techniques used in gathering data included questionnaires, observation, interviews and an analysis of student scores in both conventional examinations and computer-based assessments. Comparisons with conventional assessment methods suggest that the use of CBA techniques may improve the overall performance of students. However it is clear that the technique must not be seen as a "quick fix" for problems such as rising student numbers. If one accepts that current systems test only a relatively narrow range of skills, then the hasty implementation of CBA systems will result in a distorted and inaccurate view of student performance. In turn, this may serve to reduce the overall quality of courses and - ultimately - detract from the student learning experience. On the other hand, if one adopts a considered and methodical approach to computer-based assessment, positive benefits might include increased efficiency and quality, leading to improved student learning.

Estimating the efficiency of healthcare facilities providing HIV/AIDS treatment in Zambia:a data envelopment approach

Zambia and many other countries in Sub-Saharan Africa face a key challenge of sustaining high levels of coverage of AIDS treatment under prospects of dwindling global resources for HIV/AIDS treatment. Policy debate in HIV/AIDS is increasingly paying more focus to efficiency in the use of available resources. In this chapter, we apply Data Envelopment Analysis (DEA) to estimate short term technical efficiency of 34 HIV/AIDS treatment facilities in Zambia. The data consists of input variables such as human resources, medical equipment, building space, drugs, medical supplies, and other materials used in providing HIV/AIDS treatment. Two main outputs namely, numbers of ART-years (Anti-Retroviral Therapy-years) and pre-ART-years are included in the model. Results show the mean technical efficiency score to be 83%, with great variability in efficiency scores across the facilities. Scale inefficiency is also shown to be significant. About half of the facilities were on the efficiency frontier. We also construct bootstrap confidence intervals around the efficiency scores.

B2B e-marketplaces in the airline industry:process drivers and performance indicators

Competitive pressures are increasing within and between different strategically oriented groups of airlines. This paper focuses on the level of efficiency improvements gained by using e-Marketplaces in the procurement process. Findings from a survey among 88 international airlines reveal that the use of Business-to-Business (B2B) e-Marketplaces does play different roles across the various airline groupings. Airlines that are involved in strategic alliances show higher joint procurement activities than airlines that are not involved in strategic alliances. However, alliances are probably viewed as loose arrangements and thus airlines may be reluctant to share information on procurement prices and processes with another airline that could also be acting as a competitor. The financial involvement in or initiation of e-Marketplaces by airlines is very low. Low cost airlines show high use of e-Marketplaces, but demonstrate little financial involvement in contrast. Overall, the categories of spares and repairs, office supplies, tools and ground support equipment (GSE) show the greatest potential for reducing costs and increasing procurement process efficiencies. The intense competitive pressures facing carriers will make their search for tools to realise even incremental savings and efficiency gains ever more urgent. There is evidence that e-Marketplaces are one tool to improve such performance indicators.

An agent approach to improving radio frequency identification enabled Returnable Transport Equipment

Returnable transport equipment (RTE) such as pallets form an integral part of the supply chain and poor management leads to costly losses. Companies often address this matter by outsourcing the management of RTE to logistics service providers (LSPs). LSPs are faced with the task to provide logistical expertise to reduce RTE related waste, whilst differentiating their own services to remain competitive. In the current challenging economic climate, the role of the LSP to deliver innovative ways to achieve competitive advantage has never been so important. It is reported that radio frequency identification (RFID) application to RTE enables LSPs such as DHL to gain competitive advantage and offer clients improvements such as loss reduction, process efficiency improvement and effective security. However, the increased visibility and functionality of RFID enabled RTE requires further investigation in regards to decision‐making. The distributed nature of the RTE network favours a decentralised decision‐making format. Agents are an effective way to represent objects from the bottom‐up, capturing the behaviour and enabling localised decision‐making. Therefore, an agent based system is proposed to represent the RTE network and utilise the visibility and data gathered from RFID tags. Two types of agents are developed in order to represent the trucks and RTE, which have bespoke rules and algorithms in order to facilitate negotiations. The aim is to create schedules, which integrate RTE pick‐ups as the trucks go back to the depot. The findings assert that: - agent based modelling provides an autonomous tool, which is effective in modelling RFID enabled RTE in a decentralised utilising the real‐time data facility. ‐ the RFID enabled RTE model developed enables autonomous agent interaction, which leads to a feasible schedule integrating both forward and reverse flows for each RTE batch. ‐ the RTE agent scheduling algorithm developed promotes the utilisation of RTE by including an automatic return flow for each batch of RTE, whilst considering the fleet costs andutilisation rates. ‐ the research conducted contributes an agent based platform, which LSPs can use in order to assess the most appropriate strategies to implement for RTE network improvement for each of their clients.

Power industry restructuring and eco-efficiency changes:a new slacks-based model in Malmquist-Luenberger Index measurement

Measuring variations in efficiency and its extension, eco-efficiency, during a restructuring period in different industries has always been a point of interest for regulators and policy makers. This paper assesses the impacts of restructuring of procurement in the Iranian power industry on the performance of power plants. We introduce a new slacks-based model for Malmquist-Luenberger (ML) Index measurement and apply it to the power plants to calculate the efficiency, eco-efficiency, and technological changes over the 8-year period (2003-2010) of restructuring in the power industry. The results reveal that although the restructuring had different effects on the individual power plants, the overall growth in the eco-efficiency of the sector was mainly due to advances in pure technology. We also assess the correlation between efficiency and eco-efficiency of the power plants, which indicates a close relationship between these two steps, thus lending support to the incorporation of environmental factors in efficiency analysis. © 2014 Elsevier Ltd.

Ensuring efficiency and robustness in MANET

This paper introduces a joint load balancing and hotspot mitigation protocol for mobile ad-hoc network (MANET) termed by us as 'load_energy balance + hotspot mitigation protocol (LEB+HM)'. We argue that although ad-hoc wireless networks have limited network resources - bandwidth and power, prone to frequent link/node failures and have high security risk; existing ad hoc routing protocols do not put emphasis on maintaining robust link/node, efficient use of network resources and on maintaining the security of the network. Typical route selection metrics used by existing ad hoc routing protocols are shortest hop, shortest delay, and loop avoidance. These routing philosophy have the tendency to cause traffic concentration on certain regions or nodes, leading to heavy contention, congestion and resource exhaustion which in turn may result in increased end-to-end delay, packet loss and faster battery power depletion, degrading the overall performance of the network. Also in most existing on-demand ad hoc routing protocols intermediate nodes are allowed to send route reply RREP to source in response to a route request RREQ. In such situation a malicious node can send a false optimal route to the source so that data packets sent will be directed to or through it, and tamper with them as wish. It is therefore desirable to adopt routing schemes which can dynamically disperse traffic load, able to detect and remove any possible bottlenecks and provide some form of security to the network. In this paper we propose a combine adaptive load_energy balancing and hotspot mitigation scheme that aims at evenly distributing network traffic load and energy, mitigate against any possible occurrence of hotspot and provide some form of security to the network. This combine approach is expected to yield high reliability, availability and robustness, that best suits any dynamic and scalable ad hoc network environment. Dynamic source routing (DSR) was use as our underlying protocol for the implementation of our algorithm. Simulation comparison of our protocol to that of original DSR shows that our protocol has reduced node/link failure, even distribution of battery energy, and better network service efficiency.

Predicting the effect of mixing on oxygen transfer and nutrient removal in activated sludge basins

Activated sludge basins (ASBs) are a key-step in wastewater treatment processes that are used to eliminate biodegradable pollution from the water discharged to the natural environment. Bacteria found in the activated sludge consume and assimilate nutrients such as carbon, nitrogen and phosphorous under specific environmental conditions. However, applying the appropriate agitation and aeration regimes to supply the environmental conditions to promote the growth of the bacteria is not easy. The agitation and aeration regimes that are applied to activated sludge basins have a strong influence on the efficacy of wastewater treatment processes. The major aims of agitation by submersible mixers are to improve the contact between biomass and wastewater and the prevention of biomass settling. They induce a horizontal flow in the oxidation ditch, which can be quantified by the mean horizontal velocity. Mean values of 0.3-0.35 m s-1 are recommended as a design criteria to ensure best conditions for mixing and aeration (Da Silva, 1994). To give circulation velocities of this order of magnitude, the positioning and types of mixers are chosen from the plant constructors' experience and the suppliers' data for the impellers. Some case studies of existing plants have shown that measured velocities were not in the range that was specified in the plant design. This illustrates that there is still a need for design and diagnosis approach to improve process reliability by eliminating or reducing the number of short circuits, dead zones, zones of inefficient mixing and poor aeration. The objective of the aeration is to facilitate the quick degradation of pollutants by bacterial growth. To achieve these objectives a wastewater treatment plant must be adequately aerated; thus resulting in 60-80% of all energetic consummation being dedicated to the aeration alone (Juspin and Vasel, 2000). An earlier study (Gillot et al., 1997) has illustrated the influence that hydrodynamics have on the aeration performance as measure by the oxygen transfer coefficient. Therefore, optimising the agitation and aeration systems can enhance the oxygen transfer coefficient and consequently reduce the operating costs of the wastewater treatment plant. It is critically important to correctly estimate the mass transfer coefficient as any errors could result in the simulations of biological activity not being physically representative. Therefore, the transfer process was rigorously examined in several different types of process equipment to determine the impact that different hydrodynamic regimes and liquid-side film transfer coefficients have on the gas phase and the mass transfer of oxygen. To model the biological activity occurring in ASBs, several generic biochemical reaction models have been developed to characterise different biochemical reaction processes that are known as Activated Sludge Models, ASM (Henze et al., 2000). The ASM1 protocol was selected to characterise the impact of aeration on the bacteria consuming and assimilating ammonia and nitrate in the wastewater. However, one drawback of ASM protocols is that the hydrodynamics are assumed to be uniform by the use of perfectly mixed, plug flow reactors or as a number of perfectly mixed reactors in series. This makes it very difficult to identify the influence of mixing and aeration on oxygen mass transfer and biological activity. Therefore, to account for the impact of local gas-liquid mixing regime on the biochemical activity Computational Fluid Dynamics (CFD) was used by applying the individual ASM1 reaction equations as the source terms to a number of scalar equations. Thus, the application of ASM1 to CFD (FLUENT) enabled the investigation of the oxygen transfer efficiency and the carbon & nitrogen biological removal in pilot (7.5 cubic metres) and plant scale (6000 cubic metres) ASBs. Both studies have been used to validate the effect that the hydrodynamic regime has on oxygen mass transfer (the circulation velocity and mass transfer coefficient) and the effect that this had on the biological activity on pollutants such as ammonia and nitrate (Cartland Glover et al., 2005). The work presented here is one part to of an overall approach for improving the understanding of ASBs and the impact that they have in terms of the hydraulic and biological performance on the overall wastewater treatment process. References CARTLAND GLOVER G., PRINTEMPS C., ESSEMIANI K., MEINHOLD J., (2005) Modelling of wastewater treatment plants ? How far shall we go with sophisticated modelling tools? 3rd IWA Leading-Edge Conference & Exhibition on Water and Wastewater Treatment Technologies, 6-8 June 2005, Sapporo, Japan DA SILVA G. (1994). Eléments d'optimisation du transfert d'oxygène par fines bulles et agitateur séparé en chenal d'oxydation. PhD Thesis. CEMAGREF Antony ? France. GILLOT S., DERONZIER G., HEDUIT A. (1997). Oxygen transfer under process conditions in an oxidation ditch equipped with fine bubble diffusers and slow speed mixers. WEFTEC, Chicago, USA. HENZE M., GUJER W., MINO T., van LOOSDRECHT M., (2000). Activated Sludge Models ASM1, ASM2, ASM2D and ASM3, Scientific and Technical Report No. 9. IWA Publishing, London, UK. JUSPIN H., VASEL J.-L. (2000). Influence of hydrodynamics on oxygen transfer in the activated sludge process. IWA, Paris - France.

Thermography-based virtual MPPT scheme for improving PV energy efficiency under partial shading conditions

This paper proposes a new thermography-based maximum power point tracking (MPPT) scheme to address photovoltaic (PV) partial shading faults. Solar power generation utilizes a large number of PV cells connected in series and in parallel in an array, and that are physically distributed across a large field. When a PV module is faulted or partial shading occurs, the PV system sees a nonuniform distribution of generated electrical power and thermal profile, and the generation of multiple maximum power points (MPPs). If left untreated, this reduces the overall power generation and severe faults may propagate, resulting in damage to the system. In this paper, a thermal camera is employed for fault detection and a new MPPT scheme is developed to alter the operating point to match an optimized MPP. Extensive data mining is conducted on the images from the thermal camera in order to locate global MPPs. Based on this, a virtual MPPT is set out to find the global MPP. This can reduce MPPT time and be used to calculate the MPP reference voltage. Finally, the proposed methodology is experimentally implemented and validated by tests on a 600-W PV array.

A branch and efficiency algorithm for the optimal design of supply chain networks

Supply chain operations directly affect service levels. Decision on amendment of facilities is generally decided based on overall cost, leaving out the efficiency of each unit. Decomposing the supply chain superstructure, efficiency analysis of the facilities (warehouses or distribution centers) that serve customers can be easily implemented. With the proposed algorithm, the selection of a facility is based on service level maximization and not just cost minimization as this analysis filters all the feasible solutions utilizing Data Envelopment Analysis (DEA) technique. Through multiple iterations, solutions are filtered via DEA and only the efficient ones are selected leading to cost minimization. In this work, the problem of optimal supply chain networks design is addressed based on a DEA based algorithm. A Branch and Efficiency (B&E) algorithm is deployed for the solution of this problem. Based on this DEA approach, each solution (potentially installed warehouse, plant etc) is treated as a Decision Making Unit, thus is characterized by inputs and outputs. The algorithm through additional constraints named “efficiency cuts”, selects only efficient solutions providing better objective function values. The applicability of the proposed algorithm is demonstrated through illustrative examples.