Decision-Making Model of Performance Evaluation Matrix Based on Upper Confidence Limits

Teng-Chiao Lin, Hsing-Hui Chen, Kuen-Suan Chen (), Yen-Po Chen and Shao-Hsun Chang
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Teng-Chiao Lin: Department of Graduate Institute of Technological & Vocational Education, National Taipei University of Technology, Taipei 106344, Taiwan
Hsing-Hui Chen: Department of Industrial Education and Technology, National Changhua University of Education, Changhua 500208, Taiwan
Kuen-Suan Chen: Department of Industrial Engineering and Management, National Chin-Yi University of Technology, Taichung 411030, Taiwan
Yen-Po Chen: Department of Foreign Languages and Literatures, National Chung Hsing University, Taichung 402202, Taiwan
Shao-Hsun Chang: Department of Industrial Education and Technology, National Changhua University of Education, Changhua 500208, Taiwan

Mathematics, 2023, vol. 11, issue 16, 1-11

Abstract: A performance evaluation matrix (PEM) is an evaluation tool for assessing customer satisfaction and the importance of service items across various services. In addition, inferences based on point estimates of sample data can increase the risk of misjudgment due to sampling errors. Thus, this paper creates a decision-making model for a performance evaluation matrix based on upper confidence limits to provide various service operating systems for performance evaluation and decision making. The concept is that through the gap between customer satisfaction and the level of importance of each service item, we are able to identify critical-to-quality (CTQ) service items requiring improvement. Many studies have indicated that customer satisfaction and the importance of service items follow a beta distribution, and based on the two parameters of this distribution, the proposed indices for customer satisfaction and the importance of service items represent standardization. The vertical axis of a PEM represents the importance index; the horizontal axis represents the satisfaction index. Since these two indices have unknown parameters, this paper uses the upper confidence limit of the satisfaction index to find out the CTQ service items and the upper confidence limit of the importance index to determine the order of improvement priority for each service item. This paper then establishes a decision-making model for a PEM based on the above-mentioned decision-making rules. Since all decision-making rules proposed in this paper are established through upper confidence limits, the risk of misjudgment caused by sampling errors can be reduced. Finally, this article uses a practical example to illustrate how to use a PEM to find CTQ service items and determine the order of improvement priority for these service items that need to be improved.

Keywords: performance evaluation matrix; beta distribution; satisfaction index; importance index; upper confidence limit (search for similar items in EconPapers)
JEL-codes: C (search for similar items in EconPapers)
Date: 2023
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