Scale, Scope, and Capacity Utilization in the Indian Banking Industry

Jati Sengupta and Biresh Sahoo ()

Chapter 5 in Efficiency Models in Data Envelopment Analysis, 2006, pp 143-171 from Palgrave Macmillan

Abstract: Abstract Most of the real-life firms produce multiple outputs where the economic indicators such as scale, scope, and capacity utilization (CU) are increasingly used by many for their analysis of business decisions and public policy formation because they all contribute to various measures of productive performance of firms. The indivisibility argument plays an important role to explain scale, scope, and CU behavior of multi-product firms. The concept of minimum efficient scale (MES) arising from indivisibility argument is used as a benchmark for defining excess capacity.1 The excess capacity so defined can give no indication of the extent of idleness or underutilization in plant and machinery.2 From the above discussion, it is thus apparent that the concepts of scale, scope, and CU are closely related, and they all contribute to various measures of productive performance of firms.

Keywords: Data Envelopment Analysis; Data Envelopment Analysis Model; Capacity Utilization; Input Price; Cost Frontier (search for similar items in EconPapers)
Date: 2006
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Persistent link: https://EconPapers.repec.org/RePEc:pal:palchp:978-0-230-59817-1_5

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DOI: 10.1057/9780230598171_5

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