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Assessing supply chain financial performance using DEA modelling

Assessing supply chain financial performance using DEA modelling The purpose of this article is to derive synthetic or composite indicators (CIs) of supply chain performance using DEA modelling. DEA is employed to construct two types of consolidated performance metrics using single (component) financial performance indicators such as return on assets (ROA), sales-to-inventory ratio, and trailing 12 months of growth. The first type of metrics is based on classic DEA models, allowing for flexibility in the choice of weights; the second type is based on a common set of weights (CSW) model. In light of the results, the proposed models reveal the importance of ROA in deriving the consolidated metric. The less important component indicator is the sales-to-inventory ratio. The derivation of composite indicators based on an extension of the optimisation process is an important addition to the existing literature on supply chain, integrating DEA modelling with multiple objective programming. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png International Journal of Business Performance and Supply Chain Modelling Inderscience Publishers

Assessing supply chain financial performance using DEA modelling

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Publisher
Inderscience Publishers
Copyright
Copyright © Inderscience Enterprises Ltd. All rights reserved
ISSN
1758-9401
eISSN
1758-941X
DOI
10.1504/IJBPSCM.2013.055758
Publisher site
See Article on Publisher Site

Abstract

The purpose of this article is to derive synthetic or composite indicators (CIs) of supply chain performance using DEA modelling. DEA is employed to construct two types of consolidated performance metrics using single (component) financial performance indicators such as return on assets (ROA), sales-to-inventory ratio, and trailing 12 months of growth. The first type of metrics is based on classic DEA models, allowing for flexibility in the choice of weights; the second type is based on a common set of weights (CSW) model. In light of the results, the proposed models reveal the importance of ROA in deriving the consolidated metric. The less important component indicator is the sales-to-inventory ratio. The derivation of composite indicators based on an extension of the optimisation process is an important addition to the existing literature on supply chain, integrating DEA modelling with multiple objective programming.

Journal

International Journal of Business Performance and Supply Chain ModellingInderscience Publishers

Published: Jan 1, 2013

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