On the measurement of capacity utilisation and coast efficiency: a non-parametric approach at firm level

Abstract

In this paper we evaluate the inefficiency generated by an inadequate structure of the fixed inputs and by the difficulty to adjust them in the short-run in a sample of Romanian firms in the chemical industry over the period 1996-1997. We use Data Envelopment Analysis (DEA) and apply this methodology in an innovative setting using a cost analysis instead of the technical efficiency approach. The results show inefficiency in most of the cases due to a low degree of capacity utilisation.

China's Industrial Policy, Strategic Emerging Industries and Space Law

“…It is simply the ratio between actual production and potential 327 Kenderdine: China's Industrial Policy production in an industrial economy, but it is a supply/demand gauge that allows plants to increase and decrease their productive output relative to potential output to match market price signals (Prior & Filimon 2002). In a socialist planned economy, we can expect full employment and full capacity utilisation at both the firm level and the national aggregate.…”

Russian manufacturing production capacity: Primary trends and structural characteristics

“…The simplest methodologies for this approach include linear interpolation of values between local maximums and interpretation of those values as a potential output, the Wharton Business School Index (Klein and Summers, 1966), a comparison between current output and the output calculated as a ratio of capital and minimum capital-output ratio within a local neighborhood, 3 and a comparison between the average and maximum hours worked and capital used (Taubman and Gottschalk, 1971;Beaulieu and Mattey, 1998). In the framework of this approach, more complex methodologies should be mentioned: the optimal utilization level would occur if either short-term costs areminimized (Klein,1960;Friedman,1963;Hickman,1964;Morrison,1985;Prior and Filimon, 2002;Ray, 2015), short-term output is maximized (Johansen, 1968;Fareetal.,1989;Rayetal.,2006),orprofitismaximized (Coellietal., 2002). Recently, the structural and cyclical components of economic trends have beenisolatedusingfiltersorstructuralvectorautoregressionmethods (Andrle, 2013;Haviketal.,2014;Apokinetal.,2014;BankofRussia,2014;Sinelnikov-Murylev et al, 2014;IMF, 2014), along with econometric analyses of the correlationbetweenchangesinthecoreinflationrateandcapacityutilizationrates (McElhattan,1978;OomesandDynnikova,2006;MironovandKanofiev,2014).…”

Decomposing capacity utilization in data envelopment analysis: An application to banks in India

“…In the short run, with the given fixed input vector (x f o ), the minimum short-run variable cost C v o ðy; wÞ of firm 'o' to produce y o can be obtained from the following LP (Prior and Filimon, 2002):…”

“…See Berndt and Morrison (1981) for a detailed discussion on how variations in input prices might affect the minimum point of the SRATC and hence Y ** . 19 See, for example, among others, Klein (1960), Berndt and Morrison (1981) and Prior and Filimon (2002) for the details.…”