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Measurement and decomposition of the Malmquist productivity index for parallel production systems

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  • Kao, Chiang

Abstract

The conventional Malmquist productivity index (MPI), which ignores the internal structure of a production system when measuring changes in performance between two periods, may produce misleading results. This paper thus takes the operations of the component processes into account in investigating the MPI of parallel production systems. A relational data envelopment analysis (DEA) model is developed to measure the biennial MPIs of the system and internal processes at the same time, and it is shown that the former is a linear combination of the latter. This decomposition helps identify the processes that cause the decline in performance of the system. An example of 39 branches of a commercial bank, with deposits, sales, and services as the three major functions operating in parallel, is used to illustrate this approach.

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  • Kao, Chiang, 2017. "Measurement and decomposition of the Malmquist productivity index for parallel production systems," Omega, Elsevier, vol. 67(C), pages 54-59.
    • Handle: RePEc:eee:jomega:v:67:y:2017:i:c:p:54-59
    DOI: 10.1016/j.omega.2016.04.001
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    2. Adel Hatami-Marbini & Aliasghar Arabmaldar & John Otu Asu, 2022. "Robust productivity growth and efficiency measurement with undesirable outputs: evidence from the oil industry," OR Spectrum: Quantitative Approaches in Management, Springer;Gesellschaft für Operations Research e.V., vol. 44(4), pages 1213-1254, December.
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