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Multicomponent Efficiency Measurement and Shared Inputs in Data Envelopment Analysis: An Application to Sales and Service Performance in Bank Branches

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  • Wade Cook
  • Moez Hababou
  • Hans Tuenter

Abstract

In most applications ofDEA presented in the literature, the models presented are designedto obtain a single measure of efficiency. In many instances however,the decision making units involved may perform several differentand clearly identifiable functions, or can be separated intodifferent components. In such situations, inputs, in particularresources, are often shared among those functions. This sharingphenomenon will commonly present the technical difficulty ofhow to disaggregate an overall measure into component parts.In the present paper, we extend the usual DEA structure to onethat determines a best resource split to optimize the aggregateefficiency score. The particular application area investigatedis that involving the sales and service functions within thebranches of a bank. An illustrative application of the methodologyto a sample of branches from a major Canadian bank is given. Copyright Kluwer Academic Publishers 2000

Suggested Citation

  • Wade Cook & Moez Hababou & Hans Tuenter, 2000. "Multicomponent Efficiency Measurement and Shared Inputs in Data Envelopment Analysis: An Application to Sales and Service Performance in Bank Branches," Journal of Productivity Analysis, Springer, vol. 14(3), pages 209-224, November.
    • Handle: RePEc:kap:jproda:v:14:y:2000:i:3:p:209-224
    DOI: 10.1023/A:1026598803764
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    References listed on IDEAS

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    1. Charnes, A. & Cooper, W. W. & Huang, Z. M. & Sun, D. B., 1990. "Polyhedral Cone-Ratio DEA Models with an illustrative application to large commercial banks," Journal of Econometrics, Elsevier, vol. 46(1-2), pages 73-91.
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    4. Schaffnit, Claire & Rosen, Dan & Paradi, Joseph C., 1997. "Best practice analysis of bank branches: An application of DEA in a large Canadian bank," European Journal of Operational Research, Elsevier, vol. 98(2), pages 269-289, April.
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    7. R. D. Banker & A. Charnes & W. W. Cooper, 1984. "Some Models for Estimating Technical and Scale Inefficiencies in Data Envelopment Analysis," Management Science, INFORMS, vol. 30(9), pages 1078-1092, September.
    8. Wade Cook & Dan Chai & John Doyle & Rodney Green, 1998. "Hierarchies and Groups in DEA," Journal of Productivity Analysis, Springer, vol. 10(2), pages 177-198, October.
    9. Thompson, Russell G. & Langemeier, Larry N. & Lee, Chih-Tah & Lee, Euntaik & Thrall, Robert M., 1990. "The role of multiplier bounds in efficiency analysis with application to Kansas farming," Journal of Econometrics, Elsevier, vol. 46(1-2), pages 93-108.
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