About the
methodology
The methodology we use
for the system-based performance assessment is Data Envelopment Analysis
(DEA), which was named and popularized by Charnes, Cooper and
Rhodes in 1978.
The idea behine DEA is simple. If the following two
statements make sense to you, you can use DEA for your performance
assessment:
-
If we already know that 100 units A can produce 50 units K. Then 120 units A must be able to produce 50 units K since 120>100, or 30 units K can be produced by the same 100 units A because 30<50.
-
If we already know that 100 units A can produce 80 units K and 200 units A can produce 130 units K. How many units of A do we need to produce 120 units K? Solving (A-100)/(120-80)=(200-100)/(130-80), we need 180 units A.
DEA assumes these two statements are true. It uses methmatical progarmming technique to generate all possible input-output combinations, and compares your warehouse to the best possible.
Below are
some useful links about DEA.
Bowlin, William F., 1998, "Measuring Performance: An Introduction to Data Envelopment Analysis (DEA)", Journal of Cost Analysis, Fall 1998, pp. 3-27
Emrouznejad's DEA Home Page by Ali Emrouznejad
Anderson's DEA WWW Page by Tim Anderson
PARN's WWW Page by Niels Chr. Petersen and Ole B. Olesen.