Measurement and decomposition of the Malmquist productivity index for parallel production systems

Chiang Kao

Omega, 2017, vol. 67, issue C, 54-59

Abstract: The conventional Malmquist productivity index (MPI), which ignores the internal structure of a production system when measuring changes in performance between two periods, may produce misleading results. This paper thus takes the operations of the component processes into account in investigating the MPI of parallel production systems. A relational data envelopment analysis (DEA) model is developed to measure the biennial MPIs of the system and internal processes at the same time, and it is shown that the former is a linear combination of the latter. This decomposition helps identify the processes that cause the decline in performance of the system. An example of 39 branches of a commercial bank, with deposits, sales, and services as the three major functions operating in parallel, is used to illustrate this approach.

Keywords: Data envelopment analysis; Malmquist productivity index; Parallel system; Relational model (search for similar items in EconPapers)
Date: 2017
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (12)

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DOI: 10.1016/j.omega.2016.04.001

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