Measuring Technical Efficiency and Returns to Scale in Taiwan’s Baking Industry?A Case Study of the 85 °C Company

Chieh-Wen Chang, Kun-Shan Wu, Bao-Guang Chang and Kuo-Ren Lou
Additional contact information
Chieh-Wen Chang: Department of Management Sciences, Tamkang University, Taipei 25137, Taiwan
Kun-Shan Wu: Department of Business Administration, Tamkang University, Taipei 25137, Taiwan
Bao-Guang Chang: Department of Accounting, Tamkang University, Taipei 25137, Taiwan
Kuo-Ren Lou: Department of Management Sciences, Tamkang University, Taipei 25137, Taiwan

Sustainability, 2019, vol. 11, issue 5, 1-14

Abstract: Under an intense internationally competitive business environment, it is important to understand the production efficiency of the baking industry, where efficient management is becoming increasingly important to ensure the sustainable development of the company. Thus, this study uses data envelopment analysis (DEA) to appraise the performance of a well-known baking company (85 °C) and uses input and output constructs to measure its technical efficiency and scale efficiency scores to understand the major reasons for efficiency losses from 2011 to 2016. The empirical results indicate that low technical efficiency is the major reason for lower pure technical efficiency, since the scale efficiency is higher than pure technical efficiency. This means 85 °C is still improving overall operating efficiency and space efficiency. Moreover, the results also show that the III-generation operations style is more technically efficient and pure-technically efficient compared to those of I-generation and II-generation. Furthermore, the company’s financial performance is dependent upon the producer’s ability to stay on the production frontier due to the result of a positive relationship between return on assets (ROA) and technical efficiency. Last but not least, this study shows that 85 °C can gain higher performance and efficiency by enhancing technical efficiency and reinforcing strategic alignments with business goals.

Keywords: baking industry; data envelope analysis (DEA); Kruskal–Wallis test; return on assets (ROA) (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2019
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (7)

Downloads: (external link)
https://www.mdpi.com/2071-1050/11/5/1268/pdf (application/pdf)
https://www.mdpi.com/2071-1050/11/5/1268/ (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:gam:jsusta:v:11:y:2019:i:5:p:1268-:d:209620

Access Statistics for this article

Sustainability is currently edited by Ms. Alexandra Wu

More articles in Sustainability from MDPI
Bibliographic data for series maintained by MDPI Indexing Manager ().