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Performance measurement with multiple interrelated variables and threshold target levels: Evidence from retail firms in the US

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  • Zervopoulos, Panagiotis D.
  • Brisimi, Theodora S.
  • Emrouznejad, Ali
  • Cheng, Gang

Abstract

In this study, we developed a DEA–based performance measurement methodology that is consistent with performance assessment frameworks such as the Balanced Scorecard. The methodology developed in this paper takes into account the direct or inverse relationships that may exist among the dimensions of performance to construct appropriate production frontiers. The production frontiers we obtained are deemed appropriate as they consist solely of firms with desirable levels for all dimensions of performance. These levels should be at least equal to the critical values set by decision makers. The properties and advantages of our methodology against competing methodologies are presented through an application to a real-world case study from retail firms operating in the US. A comparative analysis between the new methodology and existing methodologies explains the failure of the existing approaches to define appropriate production frontiers when directly or inversely related dimensions of performance are present and to express the interrelationships between the dimensions of performance.

Suggested Citation

  • Zervopoulos, Panagiotis D. & Brisimi, Theodora S. & Emrouznejad, Ali & Cheng, Gang, 2016. "Performance measurement with multiple interrelated variables and threshold target levels: Evidence from retail firms in the US," European Journal of Operational Research, Elsevier, vol. 250(1), pages 262-272.
    • Handle: RePEc:eee:ejores:v:250:y:2016:i:1:p:262-272
    DOI: 10.1016/j.ejor.2015.08.055
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    2. Tao Du, 2017. "Performance Measurement of Healthcare Service and Association Discussion between Quality and Efficiency: Evidence from 31 Provinces of Mainland China," Sustainability, MDPI, vol. 10(1), pages 1-19, December.
    3. Panagiotis Mitropoulos & Panagiotis D. Zervopoulos & Ioannis Mitropoulos, 2020. "Measuring performance in the presence of noisy data with targeted desirable levels: evidence from healthcare units," Annals of Operations Research, Springer, vol. 294(1), pages 537-566, November.
    4. Youchao Tan & Yang Zhang & Roohollah Khodaverdi, 2017. "Service performance evaluation using data envelopment analysis and balance scorecard approach: an application to automotive industry," Annals of Operations Research, Springer, vol. 248(1), pages 449-470, January.

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