Selection of corporate spare parts inventory for Brazilian refineries: a smoothed data envelopment analysis frontier function using calculus of variations

Estêvão Ferreira Sêco de Alvarenga, Luiz Amancio Machado de Sousa Junior and Marcos Estellita Lins

Journal of the Operational Research Society, 2018, vol. 69, issue 3, 392-401

Abstract: This paper intends to give a small contribution to data envelopment analysis (DEA) development, among the huge research carried out in the field, by developing a model for materials selection in a corporately managed inventory that includes high-value MRO spare parts. The goal of the model is to reduce the asset value in the stocks without compromising the reliability of the operating units for Brazilian refineries. We implemented a standard DEA model and defined a smoothed DEA frontier using the efficient DMU from the model. This is achieved through the calculus of variations, generating a non-linear polynomial frontier that is continuously differentiable and contains all DEA efficient DMUs, providing a unique tangent hyperplane for each target on the efficient frontier. The main reason for smoothing the DEA frontier is to create an agile assessment of the radial efficiency of new materials without running the entire DEA mathematical programme.

Date: 2018
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DOI: 10.1057/jors.2016.44

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