Efficiency Analysis of meat processing industry in Indonesia

Jafrizal J., Robiani Bernadette and Suhel S.
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Jafrizal J.: Faculty of Economics, University of Sriwijaya
Robiani Bernadette: Faculty of Economics, University of Sriwijaya
Suhel S.: Faculty of Economics, University of Sriwijaya

Russian Journal of Agricultural and Socio-Economic Sciences, 2017, vol. 61, issue 1, 294-304

Abstract: This paper aims to analyze the efficiency of the meat processing industry in Indonesia large-scale and medium-year period 1990-2013. The method used data envelopment analysis (DEA) model of Variable Return to Scale (VRS) Input-oriented. It was found that, the estimation value Constant Return to Scale (CRS) model of efficiency with an average of 89.38 percent, which means that the industry is only able to optimize the resources available inputs to produce a production of 89.38 per cent, in other words there is still potential inputs that they can be optimized for 10.62 percent assuming all companies operating at an optimal scale. VRS model results by an average of 95.7 percent, which means that the efficiency is still below 100, there are inefficiencies at 4.3 percent, assuming the company is not operating at optimal scale due to factors existing constraints, medium scale efficiency (Scale) an average of 93.36 per cent less than 100 percent means that the industry is on a scale of inefficiency. The implications of negative growth efficiency or below 100 percent is the need for skills development of workers in order to adapt to technological upgrading and make the selection of efficient combination of inputs.

Keywords: EFFICIENCY; DATA ENVELOPMENT ANALYSIS; VARIABLE RETURN TO SCALE; MEAT PROCESSING INDUSTRY (search for similar items in EconPapers)
Date: 2017
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