Multi-period network Data Envelopment Analysis to measure the efficiency of a real business

Abstract

Measuring the efficiency of real businesses is not a simple task, because a real business may involve several processes and sub-processes, forming a very complicated dynamic network of interactions. In this paper, a customized dynamic network data envelopment analysis (NDEA) model is proposed to measure the efficiency of the sub-processes in a real business. The proposed dynamic NDEA model is fully designed and customized for IMI which is a leading institute in providing consulting management, publication, and educational services. First, we have identified the network of the Industrial Management Institute (IMI) which includes educational, consulting, and publication sub-processes. Then, the most important sub-processes and the associated dynamic interactions are determined. Afterward, a dynamic NDEA model is proposed to measure the efficiency of sub-processes. The main theoretical properties of the proposed dynamic NDEA model are also discussed through theorems. Assessing the performance of IMI's sub-processes is not a trivial task due to the complexity of sub-processes in IMI. The proposed dynamic NDEA model is applied using real operational data of the IMI gathered through a sixty-month planning horizon. An attempt has been accomplished to form a relationship between the total efficiency of the process and the efficiency of each sub-process by regression analysis. The managers of IMI can monitor the efficiency score of the main process and sub-processes during the planning horizon which can help to improve inefficient sub-process.