Developing an inverse range directional measure model to deal with positive and negative values

Abstract

Purpose To manage cash flow in supply chains, the purpose of this paper is to propose inverse data envelopment analysis (DEA) model. Design/methodology/approach This paper develops an inverse range directional measure (RDM) model to deal with positive and negative values. The proposed model is developed to estimate input and output variations such that not only efficiency score of decision making unit (DMU) remains unchanged, but also efficiency score of other DMUs do not change. Findings Given that auto making industry deals with huge variety and volumes of parts, cash flow management is so important. In this paper, inverse RDM models are developed to manage cash flow in supply chains. For the first time, the authors propose inverse DEA models to deal with negative data. By applying the inverse DEA models, managers distinguish efficient DMUs from inefficient ones and devise appropriate strategies to increase efficiency score. Given results of inverse integrated RDM model, other combinations of cash flow strategies are proposed. The suggested strategies can be taken into account as novel strategies in cash flow management. Interesting point is that such strategies do not lead to changes in efficiency scores. Originality/value In this paper, inverse input and output-oriented RDM model is developed in presence of negative data. These models are applied in resource allocation and investment analysis problems. Also, inverse integrated RDM model is developed.

A novel approach to assess sustainability of supply chains

“…One of the useful extensions of DEA is inverse DEA model (Wei et al, 2000). The inverse DEA determines changes of output/inputs without any alteration in efficiency frontier and DMU's current efficiency (Yan et al, 2002;Farzipoor Saen and Seyedi Hosseini Nia, 2019;Yousefi et al, 2019). Assuming fixed efficiency scores, the inverse DEA estimates the outputs given the inputs' change (Jahanshahloo et al, 2004a).…”

Cash Flow Management Challenges Faced by Small Family-Owned Businesses in Zimbabwe

“…With this in mind, the researchers argue that available cash is regarded as a key financial resource that should be efficiently and effectively managed to outperform competitors. Hence, cash flow management is a topical issue when it comes to the assessment and evaluation of the effectiveness of a firm's operational strategies (Chumphong et al, 2020;Kroes & Manikas, 2014;Roostika, 2019;Yousefi, Saen, & Hosseininia, 2019).…”

“…Although there is no unequivocal definition of cash flow management, it is interesting to note that there is a growing consensus among researchers that sound cash flow management is at the epicenter of business success for both small and large organizations (Kroes & Manikas, 2014;Omopariola et al, 2020;Yousefi et al, 2019). Regardless of size or ownership structure, many businesses need to accumulate and maintain sufficient cash to finance their daily operations (McDowell, 2021).…”

Pitfalls and Solutions in Inverse Models of Data Envelopment Analysis with Network Structures

“…In addition to introducing advanced and modified models of inverse data envelopment analysis, the researchers also examined various data types in these models. Yousefi et al (2019), presented an inverse input and output-oriented RDM model in presence of negative data. Çakır (2017), studied a resource allocation problem under a fuzzy environment and proposed an integrated Shannon's entropy-inverse data envelopment analysis.…”