Minor and major consolidations in inverse DEA: definition and determination

Gholam R. Amin, Ali Emrouznejad*, Said Gattoufi

*Corresponding author for this work

Research output: Contribution to journalArticle

Abstract

Many production systems have acquisition and merge operations to increase productivity. This paper proposes a novel method to anticipate whether a merger in a market is generating a major or a minor consolidation, using InvDEA model. A merger between two or more decision making units (DMUs) producing a single merged DMU that affects the efficiency frontier, defined by the pre-consolidation market conditions, is called a major consolidation. The corresponding alternative case is called a minor consolidation. A necessary and sufficient condition to distinguish the two types of consolidations is proven and two numerical illustrations in banking and supply chain management are discussed. The crucial importance of anticipating the magnitude of a consolidation in a market is outlined.
Original languageEnglish
Pages (from-to)193–200
Number of pages8
JournalComputers and Industrial Engineering
Volume103
Early online date25 Nov 2016
DOIs
Publication statusPublished - Jan 2017

Bibliographical note

Crown Copyright © 2016 Published by Elsevier Ltd. This is an open access article under the CC BY license (http://creativecommons.org/licenses/by/4.0/).

Keywords

  • merger
  • major consolidation
  • minor consolidation
  • efficiency
  • inverse Data Envelopment Analysis
  • InvDEA

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