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Port performance comparison applying data envelopment analysis (DEA)
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1993
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Port performance is influenced by many factors, making efficiency assessment complex, and data envelopment analysis (DEA) is particularly suited for evaluating service sector efficiency. This paper introduces a new method for measuring port efficiency. DEA uses mathematical programming to derive relative efficiency ratings without predefined standards, comparing units against an efficiency envelope of the most efficient ports, as illustrated in a hypothetical example of 20 ports. DEA efficiency ratings help port managers and researchers gain deeper insight, identify weaknesses, and guide improvements.
Abstract The large variety of factors that influence port performance complicates the determination of port efficiency. This paper presents a new approach to the measurement of efficiency. Data envelopment analysis (DEA), as a it is called, has particular applicability in the service sector. Applying mathematical programming techniques. DEA enables relative efficiency ratings ti be derived within a set of analysed units. Thus it does not require the developmentof ‘standards’ against which efficiency is measured, although such standards can be incorporated in the DEA analysis. The efficiency of units is compared with an ‘efficiency envelope’ that contains the most efficient units in the group. The DEA approach will be demonstrated by a hypothetical numerical example where the performance of 20 ports are compared. The DEA efficiency ratings can be useful tool for port managers and for researchers, providing a deeper insight into port performance. Weaknesses can be detected, leadungs the way to potential improvements.