Two-stage cooperation model with input freely distributed among the stages

Zha, Yong; Liang, Liang

doi:10.1016/j.ejor.2010.01.010

Cited by 120 publications

(48 citation statements)

References 16 publications

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“…In many real applications, DMUs may contain several production processes before achieving final outputs (Kao and Hwang, 2008;Zha and Liang, 2010;Zhou et al, 2013;Liu and Lu, 2012;Halkos et al, 2014;Aviles-Sacoto et al, 2015). Recently, Lozano and Villa (2010) estimated the potential merger gains of two DMUs with parallel structures and found that a hypothetical DMU combined by two DMUs could potentially have cost savings.…”

Section: Introductionmentioning

confidence: 99%

Estimation of potential gains from bank mergers: A novel two-stage cost efficiency DEA model

Shi

Emrouznejad

et al. 2017

Journal of the Operational Research Society

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This paper develops a novel two-stage cost efficiency model to estimate and decompose the potential gains from Mergers and Acquisitions (M&As). In this model, a hypothetical DMU is defined as a combination of two or more candidate DMUs. The hypothetical DMU would surpass the traditional Production Possibility Set (PPS). In order to solve the problem, a Merger Production Possibility Set (PPS M ) is constructed. The model minimizes the total cost of the hypothetical DMU while maintaining its outputs at the current level, and estimates the overall merger efficiency by comparing its minimal total cost with its actual cost. Moreover, the overall merger efficiency could be decomposed into technical efficiency, harmony efficiency, and scale efficiency. We show that the model can be extended to a two-stage structure and these efficiencies can be decomposed to both sub-systems. To show the usefulness of the proposed approach, we applied it to a real dataset of top 20 most competitive Chinese City Commercial Banks (CCBs). We concluded that (1) there exist considerably potential gains for the proposed merged banks. (2) It is also shown that the main impact on potential merger gains are from technical and harmony efficiency. (3) As an interesting result we found that the scale effect works against the merger, indicating that it is not favorable for a full-scale merger.

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Section: Introductionmentioning

confidence: 99%

Estimation of potential gains from bank mergers: A novel two-stage cost efficiency DEA model

Shi

Emrouznejad

et al. 2017

Journal of the Operational Research Society

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“…Then, the overall efficiency is evaluated in a cooperative manner. In the same context, Zha and Liang (2010) introduce a two-stage DEA model with shared inputs to be allocated among the two stages (see also Sect. 15.5).…”

Section: Game Theoretic Perspectivementioning

confidence: 99%

“…Hence, following Kao and Hwang (2008), the authors propose, under both VRS and CRS, an approach to find a set of multipliers that maximize either the first or the second stage efficiency score while maintaining the overall efficiency score. Zha and Liang (2010) analyze the two-stage network process with shared inputs as in Fig. 15.5.…”

Section: Two-stage Networkmentioning

confidence: 99%

Network, Shared Flow and Multi-level DEA Models: A Critical Review

Castelli

Pesenti

2014

International Series in Operations Research &Amp; Management Science

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In the last two decades, complex and detailed DEA models that consider the internal structure of DMUs have been proposed by several authors. This chapter describes the mathematical formulations, along with their main variants, extensions and applications, of three large and popular model families: network (with special emphasis on multi-stage), shared flow (also known as multi-component or multi-activity), and multi-level models. Each family is a different generalization of the same elementary internal structure. This review extends and updates the classification presented in Castelli et al. (Ann Oper Res 173(1):207–235, 2010)

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“…In a survey by Cook et al [10], they pointed out that the approaches of modeling DMUs with a twostage production process can be categorized as four types, i.e., standard DEA methodology, efficiency decomposition methodology, network DEA, and game-theoretic approaches. The standard DEA methodology simply uses the standard DEA model, i.e., two separate DEA models to calculate the efficiencies of two stages (e.g., Seiford and Zhu [9]; Zhu [11]; and Sexton and Lewis [12]); the efficiency decomposition methodology is that given the efficiency scores of stage 1 and stage 2, the overall efficiency could be defined as the product or the arithmetic mean of two substages' efficiencies (e.g., Kao and Hwang [13]; Chen et al [14], and Chen et al [15]); the network DEA approach extends the two-stage process to more general situation (e.g., Tone and Tsutsui [16]; Tone and Tsutsui [17]; Izadikhah et al [18]); game-theoretic approaches introduce game theory to the efficiency evaluation of twostage structure (e.g., Liang et al [19]; Zha and Liang [20]; Li et al [21]; Guo and Zhu [22]; and Izadikhah et al [18]). Except for the standard DEA approach, all other approaches attempt to correct for the above-referenced conflict issue.…”

Section: Introductionmentioning

confidence: 99%

Efficiency Bounds for Two-Stage Production Systems

Shi

2018

Mathematical Problems in Engineering

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Traditional data envelopment analysis (DEA) models find the most desirable weights for each decision-making unit (DMU) in order to estimate the highest efficiency score as possible. These efficiency scores are then used for ranking the DMUs. The main drawback is that the efficiency scores based on weights obtained from the standard DEA models ignore other feasible weights; this is due to the fact that DEA may have multiple solutions for each DMU. To overcome this problem, Salo and Punkka (2011) deemed each DMU as a "Black Box" and developed models to obtain the efficiency bounds for each DMU over sets of all its feasible weights. In many real world applications, there are DMUs that have a two-stage production system. In this paper, we extend the Salo and Punkka's (2011) model to a more common and practical case considering the two-stage production structure. The proposed approach calculates each DMU's efficiency bounds for the overall system as well as efficiency bounds for each subsystem/substage. An application for nonlife insurance companies has been discussed to illustrate the applicability of the proposed approach and show the usefulness of this method.

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Two-stage cooperation model with input freely distributed among the stages

Cited by 120 publications

References 16 publications

Estimation of potential gains from bank mergers: A novel two-stage cost efficiency DEA model

Estimation of potential gains from bank mergers: A novel two-stage cost efficiency DEA model

Network, Shared Flow and Multi-level DEA Models: A Critical Review

Efficiency Bounds for Two-Stage Production Systems

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