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Productivity and Costumer Satisfaction - A DEA Network Model

Author

Listed:
  • Löthgren, Mickael

    () (Department of Economic Statistics)

  • Tambour, Magnus

    () (Centre for Health Economics)

Abstract

This paper presents a network model incorporating customer satisfaction into efficiency and productivity measures. The network consists of a production node and a consumption node and offers flexibility in modelling the production and consumption process. Allocation of input resources to production and customer oriented activities is allowed. In the consumption process inputs and output characteristics result in customer satisfaction. The model solution identifies optimal allocation of resources between production and customer oriented activities. Data envelopment analysis estimators of the defined theoretical measures of efficiency and productivity are presented. An empirical application using data from a sample of Swedish pharmacies is included. Results from the network model and a direct productivity model indicate increased average productivity, although the productivity progress is somewhat lower in the network model.

Suggested Citation

  • Löthgren, Mickael & Tambour, Magnus, 1996. "Productivity and Costumer Satisfaction - A DEA Network Model," SSE/EFI Working Paper Series in Economics and Finance 140, Stockholm School of Economics.
  • Handle: RePEc:hhs:hastef:0140
    as

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    References listed on IDEAS

    as
    1. Mata, Jose & Portugal, Pedro, 1994. "Life Duration of New Firms," Journal of Industrial Economics, Wiley Blackwell, vol. 42(3), pages 227-245, September.
    2. Heckman, James & Singer, Burton, 1984. "A Method for Minimizing the Impact of Distributional Assumptions in Econometric Models for Duration Data," Econometrica, Econometric Society, vol. 52(2), pages 271-320, March.
    3. Kiefer, Nicholas M, 1988. "Economic Duration Data and Hazard Functions," Journal of Economic Literature, American Economic Association, vol. 26(2), pages 646-679, June.
    4. Mata, Jose & Portugal, Pedro & Guimaraes, Paulo, 1995. "The survival of new plants: Start-up conditions and post-entry evolution," International Journal of Industrial Organization, Elsevier, vol. 13(4), pages 459-481, December.
    5. Geroski, P. A., 1995. "What do we know about entry?," International Journal of Industrial Organization, Elsevier, vol. 13(4), pages 421-440, December.
    6. Raubitschek, Ruth S., 1988. "Hitting the jackpot: Product proliferation by multiproduct firms under uncertainty," International Journal of Industrial Organization, Elsevier, vol. 6(4), pages 469-488.
    7. Jovanovic, Boyan, 1982. "Selection and the Evolution of Industry," Econometrica, Econometric Society, vol. 50(3), pages 649-670, May.
    8. Audretsch, David B & Mahmood, Talat, 1995. "New Firm Survival: New Results Using a Hazard Function," The Review of Economics and Statistics, MIT Press, vol. 77(1), pages 97-103, February.
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    More about this item

    Keywords

    Customer satisfaction; data envelopment analysis; distance function; Malmquist productivity index; network model;

    JEL classification:

    • D11 - Microeconomics - - Household Behavior - - - Consumer Economics: Theory
    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity

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