Resource,service quality and performance triad: a framework for measuring efficiency of banking services

In this paper, we present the development of a theoretical framework for measuring the efficiency of banking services taking into account physical and human resources, service quality and performance. Expenditures on quality improvement efforts and the impact of service quality on financial outcomes have long intrigued researchers. Banks have traditionally focused on how to transform their physical resources to generate financial performance, and they inadvertently ignored the mediating intangible factor of service quality. A theoretical framework on the optimization triad of resource, service quality and performance is proposed here, thereby linking the marketing variables to the financial metrics. A measure for the return on quality is developed as the ratio of the potential improvements in financial performance by enhancement of service quality to the observed performance figures. Empirical results obtained from a study of 27 Indian public sector banks and their customers allow us to measure the impact of service quality on financial performance, optimal level of service quality that can be generated using existing resources and the opportunity cost for sub-optimal service delivery. Banks delivering better service are shown to have better transformation of resource to performance using superior service delivery as the medium. Our results confirm the linkage between resource, service quality and performance for services.     

Pesticide use,environmental spillovers and efficiency: A DEA risk-adjusted efficiency approach applied to Dutch arable farming

Pesticides are widely used by crop producers in developed countries to combat risk associated with pests and diseases. However, their indiscriminate use can lead to various environmental spillovers that may alter the agricultural production environment thus contributing to production risk. This study utilises a data envelopment analysis (DEA) approach to measure performance of arable farms, incorporating pesticides’ environmental spillovers and output variance as undesirable outputs in the efficiency analysis and taking explicitly into account the effect of pesticides and other inputs on production risk. The application focuses on panel data from Dutch arable farms over the period 2003–2007. A moment approach is used to compute output variance, providing empirical representations of the risk-increasing or -decreasing nature of the used inputs. Finally, shadow values of risk-adjusted inputs are computed. We find that pesticides are overused in Dutch arable farming and there is a considerable evidence of the need for decreasing pesticides’ environmental spillovers.     

Estimation and decomposition of cost efficiency in the health care food service sector: an extended stochastic frontier approach

K. M. Matawie School of Computing and Mathematics, University of Western Sydney, Locked Bag 1797, Penrith South DC NSW 1797, Australia Email: a.assaf{at}uws.edu.au Corresponding author. Email: k.matawie{at}uws.edu.au Received on 11 February 2007. Accepted on 14 September 2007. This paper introduces and implements an extended stochasticfrontier model to estimate and decompose cost efficiency (CE)in the health care foodservice sector. The interesting featureof this model is that it allows differentiation between thethree different types of efficiency: technical efficiency (TE),allocative efficiency (AE) and their associated CE. A completeillustration of these efficiencies is presented using a cross-sectionalsample of 101 hospital foodservice operations. Results showedthat the model and all its parameter coefficients were plausible,significant and satisfy all theoretical requirements. It wasalso clear that the average efficiency scores were lower forTE (80%) than AE (88%), indicating that TE is the main sourceof CE and requires further attention.     

Impact of the industry on franchise chain efficiency: a meta-DEA and context-dependent DEA approach

A meta-DEA (Data Envelopment Analysis) approach is used to analyse the impact of the industry in which the franchisor operates its business on its chain efficiency by comparing chain efficiency between and across industries (retail versus services). To provide realistic short-term and long-term objectives to inefficient chains, a level-by-level benchmarking path is developed with the context-dependent DEA approach. Furthermore, the joint implementation of both approaches enables an identification of chains for which the industry influences their efficiency, an evaluation of the efficiency share that results from industry-specific factors rather than factors common to the franchise sector as a whole, and the characterization of an implementable and achievable benchmarking defining level-by-level improvements of chain efficiency and taking into account chain characteristics. Such an analysis can help franchisors to define their future strategic and managerial orientations.     

Cost,revenue and profit efficiency measurement in DEA: A directional distance function approach

Estimation of efficiency of firms in a non-competitive market characterized by heterogeneous inputs and outputs along with their varying prices is questionable when factor-based technology sets are used in data envelopment analysis (DEA). In this scenario, a value-based technology becomes an appropriate reference technology against which efficiency can be assessed. In this contribution, the value-based models of Tone (2002) are extended in a directional DEA set up to develop new directional cost- and revenue-based measures of efficiency, which are then decomposed into their respective directional value-based technical and allocative efficiencies. These new directional value-based measures are more general, and include the existing value-based measures as special cases. These measures satisfy several desirable properties of an ideal efficiency measure. These new measures are advantageous over the existing ones in terms of (1) their ability to satisfy the most important property of translation invariance; (2) choices over the use of suitable direction vectors in handling negative data; and (3) flexibility in providing the decision makers with the option of specifying preferable direction vectors to incorporate their preferences. Finally, under the condition of no prior unit price information, a directional value-based measure of profit inefficiency is developed for firms whose underlying objectives are profit maximization. For an illustrative empirical application, our new measures are applied to a real-life data set of 50 US banks to draw inferences about the production correspondence of banking industry.     

Provider experience and technical efficiency in the treatment of stroke patients: DEA approach

This study uses Data Envelopment Analysis to examine relationships between provider experience and technical efficiency in stroke treatment patients. Using 214 hospitals grouped according to stroke treatment experience, the study examines how the inputs—average length of stay (ALOS), occupational and physical therapy charges, and all other charges—are combined to treat mild and severe stroke cases. This study finds that, on average, technical efficiency improves with experience. However, although more experienced providers are on average deemed more technically efficient, they tend to have higher charges. The study further illustrates that the gap in case severity between efficient and inefficient providers widens as experience level increases. These findings suggest there is great potential for inefficient providers to alter practice patterns to those similar to efficient providers, in order to significantly reduce aggregate expenditures.     

Influential observations in frontier models,a robust non-oriented approach to the water sector

This paper suggests an outlier detection procedure which applies a nonparametric model accounting for undesired outputs and exogenous influences in the sample. Although efficiency is estimated in a deterministic frontier approach, each potential outlier initially benefits of the doubt of not being an outlier. We survey several outlier detection procedures and select five complementary methodologies which, taken together, are able to detect all influential observations. To exploit the singularity of the leverage and the peer count, the super-efficiency and the order-m method and the peer index, it is proposed to select these observations as outliers which are simultaneously revealed as atypical by at least two of the procedures. A simulated example demonstrates the usefulness of this approach. The model is applied to the Portuguese drinking water sector, for which we have an unusually rich data set.     

Location of services and the impact on healthcare quality: insights from a simulation of a musculoskeletal physiotherapy service

Many healthcare systems are being redesigned to deliver local care with more services within the community. Relocation may enhance access but other aspects of healthcare quality should also be considered, notably waiting times and equity of care. This study examined a musculoskeletal physiotherapy service using a discrete-event simulation with simple heuristics to model patient behaviour. This combination provided an effective mechanism for incorporating the individuality of the patients in the flows along the patient pathways, subject to the varying availabilities of key resources. In particular, it captured the feedback that is critical in system performance, especially where waiting times are important. The model recognised the heterogeneity of patient attitudes and demonstrated how the behaviour of a relatively small proportion can affect the experience of all patients. The study suggested that, with careful operational management, more care could be delivered locally while exploiting many of the benefits of a centralised service.     

On the performance of universities in North Rhine-Westphalia,Germany: Government’s redistribution of funds judged using DEA efficiency measures

In Fandel and Gal (2001) [Fandel, G., Gal, T., 2001. Redistribution of funds for teaching and research among universities: The case of North Rhine-Westphalia, European Journal of Operational Research 130, 111–120] a solution for a real process of redistributing funds for teaching and research among the universities in North Rhine-Westphalia in Germany according to specific criteria was presented. The solution was based on aggregated proportional data and was determined by a negotiation process. Now that the absolute data with respect to the different subject areas of the universities are available, it is studied, to which extent the results of the redistribution can be justified by the relative efficiency measures using data envelopment analysis. Moreover, the inefficiencies or slacks, respectively, in the usage of personnel give reasons to reallocate the staff among the universities or to reduce it correspondingly.     

Vehicle and personnel routing optimization in the service sector: application to water distribution and treatment

We present an overview of the author’s Ph.D. thesis, supervised by P. Dejax and N. Bostel, which was defended in February 2006 at école des Mines de Nantes, France. The thesis is written in French, and is available at . It was conducted in the context of a research contract with a water distribution company. In a first section, we define multiperiod routing problems for service technicians. In a second section, we present some heuristics and a memetic algorithm used to solve these problems. The third section introduces optimal and near-optimal approaches based on column generation. Finally, we present some applications to the real-life case. The methods presented in Sects. 2, 3 and 4 were tested over several sets of problems, based on real-life statistics provided by the company.      

Linking customer satisfaction, employee appraisal, and business performance: an evaluation methodology in the banking sector

The linkage among customer satisfaction, employee evaluation, and business performance data is very important in modern business organizations. Several previous research efforts have studied this linkage, focusing mainly on the financial or business performance in order to analyze the efficiency of an organization. However, recent studies have tried to consider other important performance indicators, which are able to affect business operations and future growth (e.g., external and internal customer satisfaction). In the case of the banking industry, studying the relations among the aforementioned variables is able to give insight in the performance evaluation of bank branches and the viability analysis of the banking organization. This paper presents a real-world study for measuring the relative efficiency of a set of bank branches using a Data Envelopment Analysis (DEA) approach. In particular, a multistage DEA network model is proposed, using a set of performance indicators that combine customer satisfaction, employee evaluation, and business performance indices. The main aim of the presented study is to evaluate the relative efficiency of each customer service delivery step, in the environment of a bank branch. The results are also able to estimate the contribution of the assessed performance indicators to the branch’s overall efficiency, and to determine potential improvement actions.     

Fuzzy pricing,marketing and service planning in a fuzzy inventory model: A geometric programming approach

In the real world markets, demand is influenced by different parameters. Recently, many researchers have been interested in integrated production and marketing planning strategies in inventory models where demand depends on different parameters such as price and/or marketing expenditure. The quality of services that are offered to customers of a product is one of the most important parameters that affects demand in the real markets and has not been considered in development of inventory models. On the other hand, the cost parameters in real inventory systems and other parameters such as price, marketing and service elasticity to demand are imprecise and uncertain in nature. So, the notion of fuzziness can be applied to cope with this uncertainty. In this paper, a new fuzzy profit maximization inventory model with shortages is proposed. The demand is considered as a power function of price, marketing expenditure and service expenditure. Furthermore, unit cost is determined as a power function of order quantity. Since the proposed model is in a fuzzy environment, a fuzzy decision should be made to meet the decision criteria, and the results should be fuzzy. Therefore, the proposed model is formulated and solved using geometric programming and fuzzy optimization techniques to derive an approximation of the results’ membership functions. The model is illustrated with a numerical example and finally a case study is provided for evaluation and validation of the results of model.     

Promoting fundamental change in mathematics teaching: a theoretical, methodological, and empirical approach to the problem

Mathematics education reform, as conceptualized in the United States and a number of other countries, represents a fundamental change in the teaching of mathematics and the results it would produce for students. Whereas there are data that suggest some progress is being made in the direction of reform, teacher education and professional development during the last two decades have been largely unsuccessful in preparing teachers to enact the reform vision. In this article, I present a theoretical construct, major assimilatory structures, that can contribute to explaining the difficulty of promoting change in mathematics teaching. I describe a methodology—accounts of practice—for identifying major assimilatory structures of teachers and present an example of a major assimilatory structure, perception-based perspective, that emerged from our empirical work.     

Modeling of a station in CVS and an approach to analyze distributions of time intervals of vehicles departed from the station

A stochastic model is developed for an off-line station with a single berth in a computer-controlled vehicle system (CVS). Distributions of time intervals with departures of four types of vehicles from the station are derived by using conditional first passage-times between states on an aggregated Markov chain. We show an algorithm to allow a convenient analysis.     

A model to study the relationship between forecast error,inventory investment,and customer service level in a multiperiod,probabilistic environment

With the advent of Just-In-Time manufacturing strategies, reduction of inventory costs have once again become the focus of all attention. However, efforts to reduce inventory while continuing to live with poor forecasts and unduly high service level requirements, is likely to be futile.This work uses a dynamic programming approach to establish trade-off curves, tying in forecast error, customer service level, and inventory investment. This work applies to realistic, dynamic settings wherein there is uncertainty associated with demand, and lead time could be fixed or probabilistic. This work further assumes form-free probability distributions and thus avoids errors introduced into the analysis from estimating parameters of the distribution from limited data.     

Behavior settings and eco-behavioral science: a new arena for mathematical social science permitting a richer and more coherent view of human activities in social systems,part II: Relationships to established disciplines,and needs for mathematical development

Part I of this paper presented the basic concepts of behavior settings and eco-behavioral science originated by the psychologist Roger Barker, showed how they could be linked with standard economic data systems, and suggested their use as a basis for time-allocation matrices and social system accounts. Part II discusses the relationships of behavior settings and eco-behavioral science to established disciplines, describes applications of mathematics to the new concepts by Fox and associates, and points out some major areas in need of mathematical and theoretical development. These areas include representation and measurement of patterns of relationships among roles within behavior settings, relationships among behavior settings within communities and organizations, and the evolution of large, heterogeneous populations of behavior settings over time. We hope some readers will be motivated to participate in this new scientific enterprise.     

Farkas' Lemma, other theorems of the alternative, and linear programming in infinite-dimensional spaces: a purely linear-algebraic approach

We briefly consider several formulations of Farkas' Lemma first. Then we assume the setting of two vector spaces, one of them being linearly ordered, over a linearly ordered field till the end of this article. In this setting, we state a generalized version of Farkas' Lemma and prove it in a purely linear-algebraic way. Afterwards, we present Theorems of Motzkin, Tucker, Carver, Dax, and some other theorems of the alternative that characterize consistency of a finite system of linear inequalities. We also mention the Key Theorem, which is a related result. Finally, we use Farkas' Lemma to prove the Duality Theorem for linear programming (with a finite number of linear constraints). The Duality Theorem that is proved here covers, among others, linear programming in a real vector space of finite or infinite dimension and lexicographic linear programming.     

Integrated spatial assessment: a multicriteria approach to sustainable development of cultural and environmental heritage in San Marco dei Cavoti,Italy

Starting from the concept of “territory” and from the definition of “integrated assessment”, the paper defines the operational dimensions of spatial integrated assessment (ISA), applying it to the territorial context of San Marco dei Cavoti (a rural village in Southern Italy). In particular, the paper proposes an integration between analytic hierarchy process (AHP) and geographic information system (GIS) for the strategies definition of planning choices, recognizing the relevant role of the environmental aspects in the decision-making process and alternatives selection.