MULTICRITERIA MODELS IN REVENUE MANAGEMENT

Data envelopment analysis (DEA) is a method for measuring efficiency of peer decision-making units (DMUs). Conventional DEA evaluates the performance of each DMU using a set of most favourable weights. As a result, traditional DEA models can be considered methods for the analysis of the best relative efficiency or analysis of the optimistic efficiency. DEA efficient DMUs obtained from conventional DEA models create an efficient production frontier. Traditional DEA can be used to identify units with good performance in the most desirable scenarios. There is a similar approach that evaluates the performance indicators of each DMU using a set of most unfavourable weights. Accordingly, such models can be considered models for analysing the worst relative efficiency or pessimistic efficiency. This approach uses the inefficient production frontier for determining the worst relative efficiency that can be assigned to each DMU. DMUs lying on the inefficient production frontier are referred to as DEA inefficient while those neither on the efficient frontier nor on the inefficient frontier are declared DEA inefficient. It can be argued that both relative efficiencies should be considered simultaneously and any approach with only one of them would be biased. This paper proposed the integration of both efficiencies as an interval so that the overall performance score would belong to this interval. It was shown that efficiency interval provided more information than either of the two efficiencies, which was illustrated using two numerical examples.

Contributors

The rapid development of technology to meet the growing demands of projects, particularly in public administration organizations like e-government, faces various resource constraints. Selecting among dozens or even hundreds of alternative projects and portfolios, while aligning with organizational priorities, presents a complex multi-criteria decision-making challenge. This study explores the use of previous research and IS/IT portfolio management techniques to examine project prioritization practices and methods within successful city-level applications. The study further develops a prioritization model by comparing the Analytic Hierarchy Process (AHP) and Analytic Network Process (ANP) methods. The priority levels of nodes (elements) and clusters obtained from the AHP and ANP analyses show relatively insignificant differences; however, the normalized values (eigenvectors) derived from the ANP approach more realistically reflect existing realities. The ANP model offers the advantage of building connections between elements and clusters, enabling feedback analysis, and is considered more effective in bridging the gap between the model and real-world decision-making.

Evaluating the system intelligence of the intelligent building systems: Part 2: Construction and validation of analytical models

PurposeThe purpose of this paper is to efficiently assist the decision makers in evaluating and selecting the most appropriate third-party logistics (3PL) provider from environmental sustainability perspective using a two-phase model based on data envelopment analysis (DEA) and analytic network process (ANP).Design/methodology/approachThe study uses an integrated approach of DEA and ANP as an evaluation and selection methodology to select an efficient and requisite 3PL. The integrated model is a sound technique for 3PL evaluation and selection. DEA effectively screens the maximally efficient 3PLs, whereas ANP easily performs the cumbersome process of weighting diverse criteria and ranks various alternatives according to their performance on the basis of these criteria. This study lists the prominent evaluation and selection criteria taking into consideration the environmental sustainability. Finally, a real-life industrial application is presented to demonstrate the proposed method.FindingsThe current research work is devoted to the emerging research topic of environmental sustainability in logistics industry and supply chain management. The results of study indicate that eco-efficient transportation and 3PLs lead better transportation planning, better inventory and warehouse management, lower inventory cost and sustainable supply chain operations. Also, the applied approach enables the decision makers to better understand the complex relationships of the relevant criteria in the decision-making process.Research limitations/implicationsThis study does not investigate the relationships between environmental performances and differentiation advantage from the perspective of 3PLs. Also, sensitivity analysis is not performed.Practical implicationsThe developed integrated model enables decision analysts to better understand the complete evaluation process of 3PL evaluation and selection considering environmental sustainability perspective. Furthermore, the developed approach provides a more flexible, simple, accurate, effective, and systematic decision support tool for 3PL evaluation and selection.Originality/valueThe current study is first of its kind to use the integrated approach in evaluation and selection of 3PLs from environmental sustainability perspective considering the inter-dependencies among the evaluation and selection criteria.

Purpose The purpose of this paper is to provide an outline of the major contributions in the literature on the determination of the least distance in data envelopment analysis (DEA). The focus herein is primarily on methodological developments. Specifically, attention is mainly paid to modeling aspects, computational features, the satisfaction of properties and duality. Finally, some promising avenues of future research on this topic are stated. Design/methodology/approach DEA is a methodology based on mathematical programming for the assessment of relative efficiency of a set of decision-making units (DMUs) that use several inputs to produce several outputs. DEA is classified in the literature as a non-parametric method because it does not assume a particular functional form for the underlying production function and presents, in this sense, some outstanding properties: the efficiency of firms may be evaluated independently on the market prices of the inputs used and outputs produced; it may be easily used with multiple inputs and outputs; a single score of efficiency for each assessed organization is obtained; this technique ranks organizations based on relative efficiency; and finally, it yields benchmarking information. DEA models provide both benchmarking information and efficiency scores for each of the evaluated units when it is applied to a dataset of observations and variables (inputs and outputs). Without a doubt, this benchmarking information gives DEA a distinct advantage over other efficiency methodologies, such as stochastic frontier analysis (SFA). Technical inefficiency is typically measured in DEA as the distance between the observed unit and a “benchmarking” target on the estimated piece-wise linear efficient frontier. The choice of this target is critical for assessing the potential performance of each DMU in the sample, as well as for providing information on how to increase its performance. However, traditional DEA models yield targets that are determined by the “furthest” efficient projection to the evaluated DMU. The projected point on the efficient frontier obtained as such may not be a representative projection for the judged unit, and consequently, some authors in the literature have suggested determining closest targets instead. The general argument behind this idea is that closer targets suggest directions of enhancement for the inputs and outputs of the inefficient units that may lead them to the efficiency with less effort. Indeed, authors like Aparicio et al. (2007) have shown, in an application on airlines, that it is possible to find substantial differences between the targets provided by applying the criterion used by the traditional DEA models, and those obtained when the criterion of closeness is utilized for determining projection points on the efficient frontier. The determination of closest targets is connected to the calculation of the least distance from the evaluated unit to the efficient frontier of the reference technology. In fact, the former is usually computed through solving mathematical programming models associated with minimizing some type of distance (e.g. Euclidean). In this particular respect, the main contribution in the literature is the paper by Briec (1998) on Hölder distance functions, where formally technical inefficiency to the “weakly” efficient frontier is defined through mathematical distances. Findings All the interesting features of the determination of closest targets from a benchmarking point of view have generated, in recent times, the increasing interest of researchers in the calculation of the least distance to evaluate technical inefficiency (Aparicio et al., 2014a). So, in this paper, we present a general classification of published contributions, mainly from a methodological perspective, and additionally, we indicate avenues for further research on this topic. The approaches that we cite in this paper differ in the way that the idea of similarity is made operative. Similarity is, in this sense, implemented as the closeness between the values of the inputs and/or outputs of the assessed units and those of the obtained projections on the frontier of the reference production possibility set. Similarity may be measured through multiple distances and efficiency measures. In turn, the aim is to globally minimize DEA model slacks to determine the closest efficient targets. However, as we will show later in the text, minimizing a mathematical distance in DEA is not an easy task, as it is equivalent to minimizing the distance to the complement of a polyhedral set, which is not a convex set. This complexity will justify the existence of different alternatives for solving these types of models. Originality/value As we are aware, this is the first survey in this topic.

An efficiency measurement model of a university faculty is proposed with additional new sub-functions that produce new output variables, based on the network Data Envelopment Analysis (DEA) model for systems with a hierarchical structure.For production systems composed of hierarchical processes, the system efficiency is well represented as the aggregated performance of the components involved in the system. It is identified that the conventional DEA model ignores internal process activities in a university. Therefore, an improved DEA model based on a network structure that accounts for more activities in a university is proposed to measure its overall efficiency. The impact of major functions of a university are taken into account to represent the output variables in assessing the efficiency. Currently, collaboration activities have been given more attention, so, this variable is suggested as a new output for the hierarchical production system. In order to show the practicality of the model, a hypothetical set of data of 14 faculties has been used as a numerical example. The results show that none of the faculties is relatively efficient since its functions were found to be inefficient. The proposed model enables to help the management of university faculties to identify weaknesses of each function and thus to plan for suitable actions on improving the overall performance of the university.

This paper examines the strategic fit of mergers and acquisitions (M&A) in Mozambican banks, using a two‐stage data envelopment analysis (DEA) approach to compute the impact of contextual variables on efficiency scores and returns to scale of the resulting virtual merged banks. In an ‘M&A DEA’ model, different pairs of bidder and target companies are considered. In the first stage an M&A DEA model is used. Simplex regression is adopted in the second stage. The results reveal that ownership (public or foreign) impacts virtual efficiency levels. However, the findings also show that care must be exercised with M&A because the resultant banking organization could be oversized when foreign ownership is predominant, especially when public ownership is low. Given the relative sizes of the markets in terms of productive resources, M&A involving Mozambican banks can easily lead to decreasing returns to scale. Thus, a greater emphasis should be given to merging purely public banks with foreign ones and vice versa.

Data envelopment analysis (DEA) is a tool for measuring the relative efficiency of decision-making units (DMUs) that perform similar tasks. One of the uses of the DEA is the establishment of benchmarks for inefficient DMUs. These benchmarks play the role of target for inefficient DMUs. However, traditional DEA (TDEA) models fail to rank the efficient DMUs, and as a result, they cannot determine a benchmark for the inefficient DMUs. To overcome this shortcoming, this paper proposes virtual network DEA (NDEA) approach. The proposed method not only ranks the whole inefficient and efficient DMUs but also establishes a virtual benchmark called ideal DMU. The case study demonstrates the applicability of the proposed model.

Supplier selection is a critical multi-criterion decision-making activity for suc- cessful supply chain management. This study involved developing an integrated supplier selection methodology, which is constructed using analytic network process, data envelop- ment analysis, and multiple objective particle swarm optimization. The proposed integrated methodology can account for multiple supplier selection criteria and set boundaries on weight value for multiple objective data envelopment analysis inputs and outputs. To solve the data envelopment analysis model, a new algorithm based on multiple objective particle swarm optimization is introduced, which embeds with tabu list and group mechanisms, and then, it is found to be superior to the compared algorithms in solving performance on three test functions and the illustrative case. In addition, the proposed integrated method- ology was applied to a supplier selection problem of sphygmomanometer manufacturer in Taiwan to verify its applicability of decision-making process. The results show that the methodology can be implemented as an effective decision aid for supplier selection under multiple criteria with weight restrictions.

When the number of Decision-Making Units (DMUs) is not large enough compared to the total number of input parameters and outputs, traditional Data Envelopment Analysis (DEA) and Network Data Envelopment Analysis (NDEA) models often produce solutions that identify many DMUs as efficient, in addition to obtaining unrealistic weight distributions. In fact, this poor discrimination power and unrealistic weight distribution presented by DEA and NDEA models remain a major challenge, leading to the development of models to improve this performance. Thus, this paper proposes a Multiple Criteria Network Data Envelopment Analysis (MCNDEA), based on relational NDEA models. The idea of this model is to be used in network structures. To test the MCNDEA model, one a real instance linked to an evaluation problem of academic departments of a public university was used. Other instances were also used to validate the proposed MCNDEA, and these tests are included in the supplementary files. Finally, it should be noted that, in summary, the model proposed in this article had greater discrimination power of the analyzed DMUs, being able to identify the most efficient departments in each of the considered stages, besides pointing out to the University Management points of improvement regarding the best use of its resources for each department.

In this study, an intelligent approach is presented to help any simulation practitioner to evaluate simulation software alternatives and determine the best satisfying one based on his/her needs. On the other hand, this evaluation process is a typical multiple criteria decision making (MCDM) problem in the presence of evaluation criteria and a set of possible alternatives, and there are many methods in the literature, which have been used to successfully carry out this difficult and time-consuming process. In this paper, one of these methods, the analytic network process (ANP) method integrated with alpha-cut fuzzy logic is used because it can accommodate the variety of interactions, dependencies and feedback between higher and lower level elements, rather than analytic hierarchy process (AHP). In addition, an alpha-cut fuzzy extension of ANP uses uncertain human preferences as input information in the decision-making process. Instead of using the classical eigenvector prioritisation method in AHP, only employed in the prioritisation stage of ANP, an alpha-cut fuzzy logic method providing more accuracy on judgements is applied. The resulting alpha-cut fuzzy ANP enhances the potential of the conventional ANP for dealing with imprecise and uncertain human comparison judgements.

The appreciative democratic voice of DEA: A case of faculty academic performance evaluation

This paper proposes an approach that combines data envelopment analysis (DEA) with the analytic hierarchy process (AHP) and conjoint analysis, as multi-criteria decision-making methods to evaluate teachers’ performance in higher education. This process of evaluation is complex as it involves consideration of both objective and subjective efficiency assessments. The efficiency evaluation in the presence of multiple different criteria is done by DEA and results heavily depend on their selection, values, and the weights assigned to them. Objective efficiency evaluation is data-driven, while the subjective efficiency relies on values of subjective criteria usually captured throughout the survey. The conjoint analysis helps with the selection and determining the relative importance of such criteria, based on stakeholder preferences, obtained as an evaluation of experimentally designed hypothetical profiles. An efficient experimental design can be either symmetric or asymmetric depending on the structure of criteria covered by the study. Obtained importance might be a guideline for selecting adequate input and output criteria in the DEA model when assessing teachers’ subjective efficiency. Another reason to use conjoint preferences is to set a basis for weight restrictions in DEA and consequently to increase its discrimination power. Finally, the overall teacher’s efficiency is an AHP aggregation of subjective and objective teaching and research efficiency scores. Given the growing competition in the field of education, a higher level of responsibility and commitment is expected, and it is therefore helpful to identify weaknesses so that they can be addressed. Therefore, the evaluation of teachers’ efficiency at the University of Belgrade, Faculty of Organizational Sciences illustrates the usage of the proposed approach. As results, relatively efficient and inefficient teachers were identified, the reasons and aspects of their inefficiency were discovered, and rankings were made.

A renewable energy (RE) project has been brought into focus in recent years. Although there is quite a lot of research to assist investors in assessing the economic feasibility of the project, because of the lack of consideration of consumer utility, the existing approaches may still cause a biased result. In order to promote further development, this study focuses on the economic feasibility analysis of the RE project on the basis of consumer utility in the whole life cycle. Therefore, an integrated approach is proposed, which consists of triangular fuzzy numbers (TFNs), an analytic hierarchy process (AHP) and data envelopment analysis (DEA). The first step is to determine the comprehensive cost index weights of DEA by TFN–AHP. Secondly, to solve the problem, the first DEA model, which is proposed by A. Charnes, W. W. Cooper and E. Rhodes (C2R), is established to calculate the DEA effectiveness. Then, the third task involves designing a computer-based intelligent interface (CBII) to simplify realistic application and ensure performance efficiency. Finally, a solar water heater case study is demonstrated to validate the effectiveness of the entire method’s system. The study shows that this could make investors’ lives easier by using the CBII scientifically, reasonably and conveniently. Moreover, the research results could be easily extended to more complex real-world applications.