| Abstract: | The usual Data Envelopment Analysis (DEA) model for measuring the relative efficiency assumes that all plants belong to distinct
firms superior to them. For firms with more than one plant, Koopmans proposes a procedure for deriving the short-run production
frontier for each firm. Modifying his idea, a DEA model is constructed in this paper for measuring the short-run efficiency
of each plant within a firm. Based on the theory of production economics that the long-run production frontier is an envelop
super-imposed upon all short-run production frontiers, another DEA model is constructed to measure the long-run efficiency
of every plant. The long-run efficiency is always smaller than or equal to the short-run efficiency. Consequently, it is possible
that an inefficient plant can only be improved in the long-run. With the models constructed in this paper, a decision-maker
is able to distinguish between what can be achieved in the short-run and what in the long-run. To clarify the idea, an example
of Taiwan forests is adopted for illustration.
This revised version was published online in June 2006 with corrections to the Cover Date. |
