IDEAS home Printed from
   My bibliography  Save this book chapter

Economies of Scope and Capacity Utilization

In: Data Envelopment Analysis


  • William W. Cooper

    (University of Texas)

  • Lawrence M. Seiford

    (University of Michigan)

  • Kaoru Tone

    (National Graduate Institute for Policy Studies)


In this chapter, we have covered two subjects; economies of scope and capacity utilization. 1. Economies of scope concerns the problem whether any significant difference in efficiency exists between specialized and diversified firms. The specialized firms produce different (specialized) products, whereas the diversified firms produce all of the concerned products. We extended this model to comparisons of two business models where both models utilize common inputs for producing common outputs but their business styles are different. 2. Capacity utilization deals with the situation where some input values are fixed and cannot be easily altered while some are flexibly alterable. Thus, we divided inputs into fixed and variable inputs, and studied the effect on efficiency caused by the variable inputs according to whether relaxation of variable inputs improves the efficiency of DMU under evaluation. We analyzed two aspects of capacity utilization; (1) technical and (2) price-based. 3. Example applications were presented to illustrate uses of both these approaches.

Suggested Citation

  • William W. Cooper & Lawrence M. Seiford & Kaoru Tone, 2007. "Economies of Scope and Capacity Utilization," Springer Books, in: Data Envelopment Analysis, edition 0, chapter 14, pages 381-404, Springer.
  • Handle: RePEc:spr:sprchp:978-0-387-45283-8_14
    DOI: 10.1007/978-0-387-45283-8_14

    Download full text from publisher

    To our knowledge, this item is not available for download. To find whether it is available, there are three options:
    1. Check below whether another version of this item is available online.
    2. Check on the provider's web page whether it is in fact available.
    3. Perform a search for a similarly titled item that would be available.


    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:spr:sprchp:978-0-387-45283-8_14. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: . General contact details of provider: .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.