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Performance Evaluation of the Efficiency of Logistics Companies with Data Envelopment Analysis Model

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  • Pei Fun Lee

    (Department of Physical and Mathematical Science, Faculty of Science, Universiti Tunku Abdul Rahman, Kampar Campus, Jalan Universiti, Bandar Barat, Kampar 31900, Perak, Malaysia)

  • Weng Siew Lam

    (Department of Physical and Mathematical Science, Faculty of Science, Universiti Tunku Abdul Rahman, Kampar Campus, Jalan Universiti, Bandar Barat, Kampar 31900, Perak, Malaysia)

  • Weng Hoe Lam

    (Department of Physical and Mathematical Science, Faculty of Science, Universiti Tunku Abdul Rahman, Kampar Campus, Jalan Universiti, Bandar Barat, Kampar 31900, Perak, Malaysia)

Abstract

Malaysia has great geo-economic advantages, especially in becoming a major logistics and investment hub. However, as operational risk events create uncertainties, logistics companies suffer from supply and demand issues which affect their bottom lines, customer satisfaction and reputations. This is a pioneer paper to propose the optimization of the efficiency of listed logistics companies in Malaysia with operational risk factor using a data envelopment analysis (DEA) model. The basic indicator approach (BIA) is used as an output indicator for the operational risk capital requirement factor in the proposed model. This paper has practical and managerial implications with the identification of potential improvements for the inefficient listed logistics companies based on the optimal solution of the DEA model. This proposed model can be applied in emerging fields such as finance and project-based construction companies, where operational risk is a high concern.

Suggested Citation

  • Pei Fun Lee & Weng Siew Lam & Weng Hoe Lam, 2023. "Performance Evaluation of the Efficiency of Logistics Companies with Data Envelopment Analysis Model," Mathematics, MDPI, vol. 11(3), pages 1-15, January.
    • Handle: RePEc:gam:jmathe:v:11:y:2023:i:3:p:718-:d:1052708
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