List the restaurants in order of their revised

Question

Modifying the Efficiency Measures in DEA DEA does not distinguish among effi- cient DMUs because they are assigned efficiencies of 1.0 by the standard procedure. One suggestion for modifying the procedure is the following. For each efficient DMU, repeat the analysis (i.e., solve the linear programming problem) without retaining the DMU being evaluated in the set of constraints. In this form of the model, an efficient DMU may turn out to have efficiency greater than 1.0.

Analyze Exercise using this approach, calculating the revised efficiency rating for each of the DMUs.

(a) List the restaurants in order of their revised efficiencies.

(b) For each restaurant, compute how much change occurs between the efficiency rating in the standard procedure and the revised efficiency rating.

Exercise:

Evaluating Restaurant Efficiency Celia's Tacqueria is a chain of five Mexican restaurants in Florida. A DEA evaluation is being conducted to make comparisons of the different locations. Input measures for the restaurants include weekly hours of operation, fulltime equivalent staff, and weekly supply expenses. Output measures of performance include average weekly contribution to profit, market share, and annual growth rate. Data for the input and output measures are shown in Table.

(a) Perform a DEA evaluation for this set of units, listing the efficiency and the virtual outputs for each of restaurants.

(b) For each of the inefficient units, find the reference set and calculate the inputs and outputs for a corresponding HCU.

Table . Inputs and Outputs for Five Restaurants

Restaurant	Input measures
	Hours of operation	FTE staff	Supplies ($)
Jacksonville	96	16	850
Daytona	110	22	1400
Gainesville	100	18	1200
Ocala	125	25	1500
Orlando	120	24	1600
	Output measures
	Weekly	% Market	% Growth
Restaurant	profit ($)	share	rate
Jacksonville	3800	25	8.0
Daytona	4600	32	8.5
Gainesville	4400	35	8.0
Ocala	6500	30	10.0
Orlando	6000	28	9.0