Teknillinen tiedekunta, 2013
Master's Degree Programme in Industrial Management
This thesis wants to introduce into the concepts of data envelopment analysis. DEA is a non-parametric tool in the field of Operations Research applying linear programming. Data Envelopment analysis determines the technical efficiencies of decision making units by putting their relevant input and output values in relation and comparing the obtained ratios with each other. Received results support the activities of business performance management. For this research a data envelopment analysis of several industries has been deployed to obtain rankings for their technical efficiencies.
The data of this quantitative study was collected by aid of questionnaires from several small or medium-sized companies from the region North-Ostrobothnia, Finland, of which 6 returned feasible answers.
As a result of this analysis, indicators for potential process improvements are obtained and advices to the decision makers of the evaluated enterprises can be provided. The information should help to determine particular poor and well performing units and the participating companies are then to reallocate resources in order to promote their operational performances.
Due to the limited amount of data which represent the base of this research, a part of this thesis is also focusing onto the significance of achieved results. Thus this thesis tries to find answers to the following questions:
- Under which circumstances results of a data envelopment analysis have the highest degree of validity and quality and thus are most trustworthy?
- Under which circumstances participating companies could benefit most from conducting a data envelopment analysis?
In conclusion it can be said that the unlike business areas of the participating companies and the limited amount of usable data might yield in weak results. Especially a research continuation with an increase of case companies could boost the significance of this evaluation. Thus, before taking actions, companies should pursue a more profound internal research to reinforce arguments for a necessary reorganization and to clarify the optimal way of resource allocation.
Operations Research, Data Envelopment Analysis, Technical Efficiency, Small and Medium-sized Enterprises