Productivity growth and efficiency measurements in fuzzy environments with an application to health care

Health care organizations must continuously improve their productivity to sustain long-term growth and profitability. Sustainable productivity performance is mostly assumed to be a natural outcome of successful health care management. Data envelopment analysis (DEA) is a popular mathematical programming method for comparing the inputs and outputs of a set of homogenous decision making units (DMUs) by evaluating their relative efficiency. The Malmquist productivity index (MPI) is widely used for productivity analysis by relying on constructing a best practice frontier and calculating the relative performance of a DMU for different time periods. The conventional DEA requires accurate and crisp data to calculate the MPI. However, the real-world data are often imprecise and vague. In this study, the authors propose a novel productivity measurement approach in fuzzy environments with MPI. An application of the proposed approach in health care is presented to demonstrate the simplicity and efficacy of the procedures and algorithms in a hospital efficiency study conducted for a State Office of Inspector General in the United States. © 2012, IGI Global.

Social and financial efficiency of Islamic microfinance institutions:a Data Envelopment Analysis application

Microfinance has been developed as alternative solution for global poverty alleviation effort in the last 30 years. Microfinance institution (MFI) has unique characteristic wherein they face double bottom line objectives of outreach to the poor and financial sustainability. This study proposes a two-stage analysis to measure Islamic Microfinance institutions (IMFIs) performance by comparing them to conventional MFIs. First, we develop a Data Envelopment Analysis (DEA) framework to measure MFIs' efficiency in its double bottom line objectives, i.e. in terms of social and financial efficiency. In the second stage non-parametric tests are used to compare the performance and identify factors that contribute to the efficiency of IMFIs and MFIs.

Eco-efficiency measurement and material balance principle:an application in power plants Malmquist Luenberger Index

Incorporating Material Balance Principle (MBP) in industrial and agricultural performance measurement systems with pollutant factors has been on the rise in recent years. Many conventional methods of performance measurement have proven incompatible with the material flow conditions. This study will address the issue of eco-efficiency measurement adjusted for pollution, taking into account materials flow conditions and the MBP requirements, in order to provide ‘real’ measures of performance that can serve as guides when making policies. We develop a new approach by integrating slacks-based measure to enhance the Malmquist Luenberger Index by a material balance condition that reflects the conservation of matter. This model is compared with a similar model, which incorporates MBP using the trade-off approach to measure productivity and eco-efficiency trends of power plants. Results reveal similar findings for both models substantiating robustness and applicability of the proposed model in this paper.

Measurement efficiency and productivity in SAS/OR

This paper explores the use of the optimisation procedures in SAS/OR software with application to the measurement of efficiency and productivity of decision-making units (DMUs) using data envelopment analysis (DEA) techniques. DEA was originally introduced by Charnes et al. [J. Oper. Res. 2 (1978) 429] is a linear programming method for assessing the efficiency and productivity of DMUs. Over the last two decades, DEA has gained considerable attention as a managerial tool for measuring performance of organisations and it has widely been used for assessing the efficiency of public and private sectors such as banks, airlines, hospitals, universities and manufactures. As a result, new applications with more variables and more complicated models are being introduced. Further to successive development of DEA a non-parametric productivity measure, Malmquist index, has been introduced by Fare et al. [J. Prod. Anal. 3 (1992) 85]. Employing Malmquist index, productivity growth can be decomposed into technical change and efficiency change. On the other hand, the SAS is a powerful software and it is capable of running various optimisation problems such as linear programming with all types of constraints. To facilitate the use of DEA and Malmquist index by SAS users, a SAS/MALM code was implemented in the SAS programming language. The SAS macro developed in this paper selects the chosen variables from a SAS data file and constructs sets of linear-programming models based on the selected DEA. An example is given to illustrate how one could use the code to measure the efficiency and productivity of organisations.

ICT and technical efficiency of the manufacturing industries in Iran

This paper extends the existing evidence on the relationship between Information and Communication Technology (ICT) and productivity using data from the entire Iranian manufacturing sector (22 industries) over the period 1993?1999. Estimates of efficiency using panel data confirm the positive and significant impact of ICT investments on productivity. Our finding is consistent with the most recent literatures in the context of developed and a few middle-income developing countries. Human capital and increasing ICT capital are probably two determining factors in gaining the positive payoffs from ICT investments in Iran.

A cautionary note on methods of comparing programmatic efficiency between two or more groups of DMUs in data envelopment analysis

In some applications of data envelopment analysis (DEA) there may be doubt as to whether all the DMUs form a single group with a common efficiency distribution. The Mann-Whitney rank statistic has been used to evaluate if two groups of DMUs come from a common efficiency distribution under the assumption of them sharing a common frontier and to test if the two groups have a common frontier. These procedures have subsequently been extended using the Kruskal-Wallis rank statistic to consider more than two groups. This technical note identifies problems with the second of these applications of both the Mann-Whitney and Kruskal-Wallis rank statistics. It also considers possible alternative methods of testing if groups have a common frontier, and the difficulties of disaggregating managerial and programmatic efficiency within a non-parametric framework. © 2007 Springer Science+Business Media, LLC.

Programmatic efficiency comparisons between unequally sized groups of DMUs in DEA

Data envelopment analysis (DEA) is a popular non-parametric technique for determining the efficiency of a homogeneous set of decision-making units (DMUs). In many practical cases, there is some doubt if the all the DMUs form a single group with a common efficiency distribution. The Mann-Whitney rank statistic has been used in DEA both to test if two groups of DMUs come from a common efficiency distribution and also to test if the two groups have a common frontier, each of which are likely to have important but different policy implications for the management of the groups. In this paper it is demonstrated that where the Mann-Whitney rank statistic is used for the second of these it is likely to overestimate programmatic inefficiency, particularly of the smaller group. A new non-parametric statistic is proposed for the case of comparing the efficient frontiers of two groups, which overcomes the problems we identify in the use of the Mann-Whitney rank statistic for this purpose. © 2005 Operational Research Society Ltd. All rights reserved.

Introduction to the theory and application of data envelopment analysis:a foundation text with integrated software

The book aims to introduce the reader to DEA in the most accessible manner possible. It is specifically aimed at those who have had no prior exposure to DEA and wish to learn its essentials, how it works, its key uses, and the mechanics of using it. The latter will include using DEA software. Students on degree or training courses will find the book especially helpful. The same is true of practitioners engaging in comparative efficiency assessments and performance management within their organisation. Examples are used throughout the book to help the reader consolidate the concepts covered. Table of content: List of Tables. List of Figures. Preface. Abbreviations. 1. Introduction to Performance Measurement. 2. Definitions of Efficiency and Related Measures. 3. Data Envelopment Analysis Under Constant Returns to Scale: Basic Principles. 4. Data Envelopment Analysis under Constant Returns to Scale: General Models. 5. Using Data Envelopment Analysis in Practice. 6. Data Envelopment Analysis under Variable Returns to Scale. 7. Assessing Policy Effectiveness and Productivity Change Using DEA. 8. Incorporating Value Judgements in DEA Assessments. 9. Extensions to Basic DEA Models. 10. A Limited User Guide for Warwick DEA Software. Author Index. Topic Index. References.

A mathematical model for dynamic efficiency using data envelopment analysis

In this paper we propose a data envelopment analysis (DEA) based method for assessing the comparative efficiencies of units operating production processes where input-output levels are inter-temporally dependent. One cause of inter-temporal dependence between input and output levels is capital stock which influences output levels over many production periods. Such units cannot be assessed by traditional or 'static' DEA which assumes input-output correspondences are contemporaneous in the sense that the output levels observed in a time period are the product solely of the input levels observed during that same period. The method developed in the paper overcomes the problem of inter-temporal input-output dependence by using input-output 'paths' mapped out by operating units over time as the basis of assessing them. As an application we compare the results of the dynamic and static model for a set of UK universities. The paper is suggested that dynamic model capture the efficiency better than static model. © 2003 Elsevier Inc. All rights reserved.

Comparative efficiency analysis of Portuguese 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 paper reports on an assessment of the branches of a Portuguese bank in terms of their performance in their new roles in three different areas: Their efficiency in fostering the use of new transaction channels, their efficiency in increasing sales and their customer base, and their efficiency in generating profits. Service quality is also a major issue in service organisations like bank branches, and therefore we analyse the way this dimension of performance has been accounted for in the literature and take it into account in our empirical application. We have used data envelopment analysis (DEA) for the different performance assessments, but we depart from traditional DEA models in some cases. Performance comparisons on each dimension allowed us to identify benchmark bank branches and also problematic bank branches. In addition, we found positive links between operational and profit efficiency and also between transactional and operational efficiency. Service quality is positively related with operational and profit efficiency. © 2006 Elsevier B.V. All rights reserved.

Malmquist indexes using a geometric distance function (GDF):application to a sample of Portuguese bank branches

Traditional approaches to calculate total factor productivity (TFP) change through Malmquist indexes rely on distance functions. In this paper we show that the use of distance functions as a means to calculate TFP change may introduce some bias in the analysis, and therefore we propose a procedure that calculates TFP change through observed values only. Our total TFP change is then decomposed into efficiency change, technological change, and a residual effect. This decomposition makes use of a non-oriented measure in order to avoid problems associated with the traditional use of radial oriented measures, especially when variable returns to scale technologies are to be compared. The proposed approach is applied in this paper to a sample of Portuguese bank branches.

A study in the application of domestic solar assisted heat pumps for heating and cooling

In the present work, the more important parameters of the heat pump system and of solar assisted heat pump systems were analysed in a quantitative way. Ideal and real Rankine cycles applied to the heat pump, with and without subcooling and superheating were studied using practical recommended values for their thermodynamics parameters. Comparative characteristics of refrigerants here analysed looking for their applicability in heat pumps for domestic heating and their effect in the performance of the system. Curves for the variation of the coefficient of performance as a function of condensing and evaporating temperatures were prepared for R12. Air, water and earth as low-grade heat sources and basic heat pump design factors for integrated heat pumps and thermal stores and for solar assisted heat pump-series, parallel and dual-systems were studied. The analysis of the relative performance of these systems demonstrated that the dual system presents advantages in domestic applications. An account of energy requirements for space and hater heating in the domestic sector in the O.K. is presented. The expected primary energy savings by using heat pumps to provide for the heating demand of the domestic sector was found to be of the order of 7%. The availability of solar energy in the U.K. climatic conditions and the characteristics of the solar radiation here studied. Tables and graphical representations in order to calculate the incident solar radiation over a tilted roof were prepared and are given in this study in section IV. In order to analyse and calculate the heating load for the system, new mathematical and graphical relations were developed in section V. A domestic space and water heating system is described and studied. It comprises three main components: a solar radiation absorber, the normal roof of a house, a split heat pump and a thermal store. A mathematical study of the heat exchange characteristics in the roof structure was done. This permits to evaluate the energy collected by the roof acting as a radiation absorber and its efficiency. An indication of the relative contributions from the three low-grade sources: ambient air, solar boost and heat loss from the house to the roof space during operation is given in section VI, together with the average seasonal performance and the energy saving for a prototype system tested at the University of Aston. The seasonal performance as found to be 2.6 and the energy savings by using the system studied 61%. A new store configuration to reduce wasted heat losses is also discussed in section VI.

A semi-oriented radial measure for measuring the efficiency of decision making units with negative data, using DEA

Data Envelopment Analysis (DEA) is a nonparametric method for measuring the efficiency of a set of decision making units such as firms or public sector agencies, first introduced into the operational research and management science literature by Charnes, Cooper, and Rhodes (CCR) [Charnes, A., Cooper, W.W., Rhodes, E., 1978. Measuring the efficiency of decision making units. European Journal of Operational Research 2, 429–444]. The original DEA models were applicable only to technologies characterized by positive inputs/outputs. In subsequent literature there have been various approaches to enable DEA to deal with negative data. In this paper, we propose a semi-oriented radial measure, which permits the presence of variables which can take both negative and positive values. The model is applied to data on a notional effluent processing system to compare the results with those yielded by two alternative methods for dealing with negative data in DEA: The modified slacks-based model suggested by Sharp et al. [Sharp, J.A., Liu, W.B., Meng, W., 2006. A modified slacks-based measure model for data envelopment analysis with ‘natural’ negative outputs and inputs. Journal of Operational Research Society 57 (11) 1–6] and the range directional model developed by Portela et al. [Portela, M.C.A.S., Thanassoulis, E., Simpson, G., 2004. A directional distance approach to deal with negative data in DEA: An application to bank branches. Journal of Operational Research Society 55 (10) 1111–1121]. A further example explores the advantages of using the new model.

Malmquist-type indices in the presence of negative data:an application to bank branches

In this paper we develop an index and an indicator of productivity change that can be used with negative data. For that purpose the range directional model (RDM), a particular case of the directional distance function, is used for computing efficiency in the presence of negative data. We use RDM efficiency measures to arrive at a Malmquist-type index, which can reflect productivity change, and we use RDM inefficiency measures to arrive at a Luenberger productivity indicator, and relate the two. The productivity index and indicator are developed relative to a fixed meta-technology and so they are referred to as a meta-Malmquist index and meta-Luenberger indicator. We also address the fact that VRS technologies are used for computing the productivity index and indicator (a requirement under negative data), which raises issues relating to the interpretability of the index. We illustrate how the meta-Malmquist index can be used, not only for comparing the performance of a unit in two time periods, but also for comparing the performance of two different units at the same or different time periods. The proposed approach is then applied to a sample of bank branches where negative data were involved. The paper shows how the approach yields information from a variety of perspectives on performance which management can use.

Efficiency improvements to the Groupe Special Mobile (GSM) digital mobile radio system

Groupe Spécial Mobile (GSM) has been developed as the pan-European second generation of digital mobile systems. GSM operates in the 900 MHz frequency band and employs digital technology instead of the analogue technology of its predecessors. Digital technology enables the GSM system to operate in much smaller zones in comparison with the analogue systems. The GSM system will offer greater roaming facilities to its subscribers, extended throughout the countries that have installed the system. The GSM system could be seen as a further enhancement to European integration. GSM has adopted a contention-based protocol for multipoint-to-point transmission. In particular, the slotted-ALOHA medium access protocol is used to coordinate the transmission of the channel request messages between the scattered mobile stations. Collision still happens when more than one mobile station having the same random reference number attempts to transmit on the same time-slot. In this research, a modified version of this protocol has been developed in order to reduce the number of collisions and hence increase the random access channel throughput compared to the existing protocol. The performance evaluation of the protocol has been carried out using simulation methods. Due to the growing demand for mobile radio telephony as well as for data services, optimal usage of the scarce availability radio spectrum is becoming increasingly important. In this research, a protocol has been developed whereby the number of transmitted information packets over the GSM system is increased without any additional increase of the allocated radio spectrum. Simulation results are presented to show the improvements achieved by the proposed protocol. Cellular mobile radio networks commonly respond to an increase in the service demand by using smaller coverage areas. As a result, the volume of the signalling exchanges increases. In this research, a proposal for interconnecting the various entitles of the mobile radio network over the future broadband networks based on the IEEE 802.6 Metropolitan Area Network (MAN) is outlined. Simulation results are presented to show the benefits achieved by interconnecting these entities over the broadband Networks.