An Evaluation of Cross-Efficiency Methods, Applied to Measuring Warehouse Performance

Balk, Bert M.; Koster, René de; Kaps, Christian; Zofío, José L.

doi:10.2139/ssrn.3083526

Cited by 6 publications

(7 citation statements)

References 51 publications

(59 reference statements)

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“…The principal advantage of using the DEA method is its flexibility to incorporate factors incomparable a priori (both inputs and outputs) that makes the results easily interpretable. As Balk et al 2017 illustrate, the DEA method searches for the most favorable weight when evaluating a production unit, by constructing a virtual aggregate input to output productivity ratio, each constructed as a linear combination of observed values.…”

Section: Data and Variablesmentioning

confidence: 99%

Environmentalism in the EU-28 context: the impact of governance quality on environmental energy efficiency

Apergis

Garćıa

2019

Environ Sci Pollut Res

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Environmental policies are a significant cornerstone of a developed economy, but the question that arises is whether such policies lead to a sustainable growth path. It is clear that the energy sector plays a pivotal role in environmental policies, and although the current literature has focused on examining the link between energy consumption and economic growth through an abundance of studies, it does not explicitly consider the role of institutional or governance quality variables in the process. Both globalization and democracy are important drivers of sustainability, while environmentalism is essential for the objective of gaining a “better world.” Governance quality is expected to be the key, not only for economic purposes but also for the efficiency of environmental policies. To that end, the analysis in this paper explores the link between governance quality and energy efficiency for the EU-28 countries, spanning the period 1995 to 2014. The findings document that there is a nexus between energy efficiency and income they move together: the most efficient countries are in the group with higher GDP per capita. Furthermore, the results show that governance quality is an important driver of energy efficiency and, hence, of environmental policies.

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Section: Data and Variablesmentioning

confidence: 99%

Environmentalism in the EU-28 context: the impact of governance quality on environmental energy efficiency

Apergis

Garćıa

2019

Environ Sci Pollut Res

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“…To aggregate all cross-efficiencies in a multiplicative framework we depart on this occasion from standard practice and use the geometric mean, whose properties make the aggregation meaningful when consistent (transitive) bilateral comparisons of performance in terms of productivity are pursued, see Aczél and Roberts (1989) and Balk et al (2017). Hence:…”

Section: Profitability Cross-efficiencymentioning

confidence: 99%

New Definitions of Economic Cross-efficiency

Aparicio

Zofío

2020

International Series in Operations Research &Amp; Management Science

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Overall efficiency measures were introduced in the literature for evaluating the economic performance of firms when reference prices are available. These references are usually observed market prices. Recently, Aparicio and Zofío (2019) have shown that the result of applying cross-efficiency methods (Sexton et al., 1986), yielding an aggregate multilateral index that compares the technical performance of firms using the shadow prices of competitors, can be precisely reinterpreted as a measure of economic efficiency. They termed the new approach 'economic cross-efficiency'. However, these authors restrict their analysis to the basic definitions corresponding to the Farrell (1957) and Nerlove (1965) approaches, i.e., based on the duality between the cost function and the input distance function and between the profit function and the directional distance function, respectively. Here we complete their proposal by introducing new economic cross-efficiency measures related to other popular approaches for measuring economic performance. Specifically those based on the duality between the profitability (maximum revenue to cost) and the generalized (hyperbolic) distance function, and between the profit function and either the weighted additive or the Hölder distance function. Additionally, we introduce panel data extensions related to the so-called cost Malmquist index and the profit Luenberger indicator. Finally, we illustrate the models resorting to Data Envelopment Analysis techniquesfrom which shadow prices are obtained, and considering a banking industry dataset previously used in the cross-efficiency literature.

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“…The reason for this is that problem (1), (2), (13), (4) represents an input-oriented DEA model with outputs and a single input, equal to unity (Lovell and L Pastor 1999). It is well-known that the optimal objective value of an input-oriented model represents an input reduction factor for reaching the best-practice frontier by the decisionmaking unit and thus its inverse radial distance to that frontier (Balk et al 2017;Cooper et al 2011, Section 1.5). Therefore, averaging peer ratings in terms of their harmonic mean lends itself to a natural interpretation: averaging of radial distances rather than their reciprocals.…”

Section: Ensuring a Weakly Convex Weight Order We Address Issue (I) mentioning

confidence: 99%

The Voting Analytic Hierarchy Process revisited: A revised method with application to sustainable supplier selection

Pishchulov

Trautrims

Chesney

et al. 2019

International Journal of Production Economics

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Civil society increasingly holds focal companies accountable for ensuring socially and environmentally sustainable production standards among their supply base. These standards entail increased levels of complexity to be addressed by appropriately designed tools, such as the Voting Analytic Hierarchy Process (VAHP) proposed by Liu and Hai (2005). This method of multi-criteria group decision making structures decision criteria in a hierarchical fashion as per Saaty's Analytic Hierarchy Process (AHP) and employs data envelopment analysis (DEA) for deriving criteria weights from the ordinal preferences of the group members. Compared to AHP, the method permits a simpler application in a group decision context. However, its theoretical underpinnings have been questioned in the literature. This specifically concerns (i) the requirement of a strong convex order for the importance weights of ordinal rank gradations, and (ii) the choice of discrimination threshold for consecutive rank weights in the underlying DEA model. We propose a revised VAHP method that overcomes both issues (i) and (ii) by pursuing a game-theoretic approach to elicitation of criteria weights-so as to remove subjectivity from rank discrimination. We illustrate the application of the method on a real-world problem of sustainable supplier selection. We contribute to theory by proposing a more robust VAHP tool that helps supply chain and purchasing managers selecting suppliers based on a comprehensive set of criteria spanning all three sustainability dimensions (economic, environmental, and social), while coping with parsimonious input by group decisionmakers.

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An Evaluation of Cross-Efficiency Methods, Applied to Measuring Warehouse Performance

Cited by 6 publications

References 51 publications

Environmentalism in the EU-28 context: the impact of governance quality on environmental energy efficiency

Environmentalism in the EU-28 context: the impact of governance quality on environmental energy efficiency

New Definitions of Economic Cross-efficiency

The Voting Analytic Hierarchy Process revisited: A revised method with application to sustainable supplier selection

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