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DEA Models for Identifying Critical Performance Measures

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  • Yao Chen
  • Joe Zhu

Abstract

In performance evaluation, it is important to identify both the efficient frontier and the critical measures. Data envelopment analysis (DEA) has been proven an effective tool for estimating the efficient frontiers, and the optimized DEA weights may be used to identify the critical measures. However, due to multiple DEA optimal weights, a unique set of critical measures may not be obtained for each decision making unit (DMU). Based upon a set of modified DEA models, this paper develops an approach to identify the critical measures for each DMU. Using a set of four Fortune's standard performance measures, capital market value, profit, revenue and number of employees, we perform a performance comparison between the Fortune's e-corporations and 1000 traditional companies. Profit is identified as the critical measure to the performance of e-corporations while revenue the critical measure to the Fortune's 1000 companies. This finding confirms that high revenue does not necessarily mean profit for e-corporations while revenue means a stable proportion of profit for the Fortune's 1000 companies. Copyright Kluwer Academic Publishers 2003

Suggested Citation

  • Yao Chen & Joe Zhu, 2003. "DEA Models for Identifying Critical Performance Measures," Annals of Operations Research, Springer, vol. 124(1), pages 225-244, November.
    • Handle: RePEc:spr:annopr:v:124:y:2003:i:1:p:225-244:10.1023/b:anor.0000004771.11875.9f
    DOI: 10.1023/B:ANOR.0000004771.11875.9f
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    Citations

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    Cited by:

    1. Javier Vidal-García & Marta Vidal & Sabri Boubaker & Majdi Hassan, 2018. "The efficiency of mutual funds," Annals of Operations Research, Springer, vol. 267(1), pages 555-584, August.
    2. C-T Bruce Ho, 2011. "Measuring dot com efficiency using a combined DEA and GRA approach," Journal of the Operational Research Society, Palgrave Macmillan;The OR Society, vol. 62(4), pages 776-783, April.
    3. Kan Wang & Yunpeng Zhang & Li Lei & Shuai Qiu, 2021. "Evaluation on the Efficiency of LED Energy Enterprises in China by Employing the DEA Model," Mathematics, MDPI, vol. 9(19), pages 1-21, September.
    4. Rapee PONGPANICH & Ke-Chung PENG & Kamonthip MAICHUM, 2017. "The performance measurement of listed companies of the agribusiness sector on the stock exchange of Thailand," Agricultural Economics, Czech Academy of Agricultural Sciences, vol. 63(5), pages 234-245.
    5. Chen-En Hou & Wen-Min Lu & Shiu-Wan Hung, 2019. "Does CSR matter? Influence of corporate social responsibility on corporate performance in the creative industry," Annals of Operations Research, Springer, vol. 278(1), pages 255-279, July.

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