 A multi-division efficiency evaluation of U.S. electric power companies using a weighted slacks-based measureMiki Tsutsui and Mika Goto Socio-Economic Planning Sciences, 2009, vol. 43, issue 3, 201-208 Abstract: Prior to the 1990s, the electric power industry was highly regulated across the world. Under a liberalization policy to open markets and to grow competition commenced in the early 1990s, efficient management has become a necessity for companies in this industry. The current study examines the divisional efficiencies of multi-functional, vertically integrated companies seeking to optimize their overall management efficiency. For this purpose, divisional cost data are used as input into a slacks-based measure (SBM) model. This provides divisional efficiency indices based on slacks, as well as one for the larger firm-level management function. Further, given the important role of cost structure, we introduce a modified SBM, named the weighted SBM (WSBM), which directly incorporates division-specific weights into the objective function. Results reveal that the power generation divisions of the companies studied have significant influence on the overall cost, whereas the impact of the other four divisions - transmission, distribution, sales and general administrative - is limited. Keywords: Weighted; slacks-based; measure; Divisional; efficiency; Vertical; integration; Electric; power; company (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:soceps:v:43:y:2009:i:3:p:201-208 Access Statistics for this article Socio-Economic Planning Sciences is currently edited by Barnett R. Parker More articles in Socio-Economic Planning Sciences from Elsevier |
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