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Using Data Envelopment Analysis (Dea) In Capital Rationing For Evaluating And Ranking Projects Investment: The Case Of Hodna Milk-Algeria

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  • BOUGUERRA RABAH
  • AKKARI MOSTEFA

Abstract

Purpose - the application of DEA in term of linear programming (LP) to capital rationing problem, and illustrates the interpretation of the optimal of LP solution so that management could translate and use that information in effective financial decisions. Design/methodology – The research design consists of a two-part study, consisting first of a content analysis of the multiple variables (inputs) that are available to achieve the desirable objective (output) stated by “Hodna Milk”, followed by analysis of the problem solution. Results - The empirical analysis revealed that Project 1, 2 and 3 are fully accepted, project 5 and 6 are partially accepted, while project 4 is totally rejected because of its zero contribution to the NPV.

Suggested Citation

  • Bouguerra Rabah & Akkari Mostefa, 2012. "Using Data Envelopment Analysis (Dea) In Capital Rationing For Evaluating And Ranking Projects Investment: The Case Of Hodna Milk-Algeria," Journal of Academic Research in Economics, Spiru Haret University, Faculty of Accounting and Financial Management Constanta, vol. 4(2 (July)), pages 194-208.
  • Handle: RePEc:shc:jaresh:v:4:y:2012:i:2:p:194-208
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    Keywords

    Data envelopment analysis; project investment; capital rationing; project ranking; Hodna Milk;

    JEL classification:

    • C61 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Optimization Techniques; Programming Models; Dynamic Analysis

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