Performance measurement with multiple interrelated variables and threshold target levels: evidence from retail firms in the US

Panagiotis D. Zervopoulos, Theodora S. Brisimi, Ali Emrouznejad, Gang Cheng*

*Corresponding author for this work

Research output: Contribution to journalArticle

Abstract

In this study, we developed a DEA-based performance measurement methodology that is consistent with performance assessment frameworks such as the Balanced Scorecard. The methodology developed in this paper takes into account the direct or inverse relationships that may exist among the dimensions of performance to construct appropriate production frontiers. The production frontiers we obtained are deemed appropriate as they consist solely of firms with desirable levels for all dimensions of performance. These levels should be at least equal to the critical values set by decision makers. The properties and advantages of our methodology against competing methodologies are presented through an application to a real-world case study from retail firms operating in the US. A comparative analysis between the new methodology and existing methodologies explains the failure of the existing approaches to define appropriate production frontiers when directly or inversely related dimensions of performance are present and to express the interrelationships between the dimensions of performance.

Original languageEnglish
Pages (from-to)262–272
Number of pages11
JournalEuropean Journal of Operational Research
Volume250
Issue number1
Early online date8 Sep 2015
DOIs
Publication statusPublished - 1 Apr 2016

Bibliographical note

-© 2015, Elsevier. Licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International http://creativecommons.org/licenses/by-nc-nd/4.0/

Keywords

  • balanced scorecard
  • data envelopment analysis
  • OR in service industries
  • performance management

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