UNSPECIFIED. (2005) Cost efficiency measurement with price uncertainty: a DEA application to bank branch assessments. EUROPEAN JOURNAL OF OPERATIONAL RESEARCH, 161 (2). pp. 432-446. ISSN 0377-2217

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Abstract

This paper enhances cost efficiency measurement methods to account for different scenarios relating to input price information. These consist of situations where prices are known exactly at each decision making unit (DMU) and situations with incomplete price information. The main contribution of this paper consists of the development of a method for the estimation of upper and lower bounds for the cost efficiency (CE) measure in situations of price uncertainty, where only the maximal and minimal bounds of input prices can be estimated for each DMU. The bounds of the CE measure are obtained from assessments in the light of the most favourable price scenario (optimistic perspective) and the least favourable price scenario (pessimistic perspective). The assessments under price uncertainty are based on extensions to the Data Envelopment Analysis (DEA) model that incorporate weight restrictions of the form of input cone assurance regions. The applicability of the models developed is illustrated in the context of the analysis of bank branch performance. The results obtained in the case study showed that the DEA models can provide robust estimates of cost efficiency even in situations of price uncertainty. (C) 2003 Elsevier B.V. All rights reserved.

Item Type:	Journal Article
Subjects:	H Social Sciences > HD Industries. Land use. Labor > HD28 Management. Industrial Management
Journal or Publication Title:	EUROPEAN JOURNAL OF OPERATIONAL RESEARCH
Publisher:	ELSEVIER SCIENCE BV
ISSN:	0377-2217
Date:	1 March 2005
Volume:	161
Number:	2
Number of Pages:	15
Page Range:	pp. 432-446
Identification Number:	10.1016/j.ejor.2003.07.018
Publication Status:	Published
URI:	http://wrap.warwick.ac.uk/id/eprint/7860

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