Measuring the Performance of Pallet Rental Companies: Integer-Valued DEA Models With Generalized Reference Sets

Abstract

The development of the pallet rental industry is moving at a rapid pace. However, there is no literature on the performance evaluation of pallet rental companies except our previous study. This paper contributes to extending our previous super-efficiency integer-valued DEA (data envelope analysis) model to a group of integer-valued DEA models with generalized reference sets (G-IDEA). According to the proposed approach, the reference sets for decision-making units (DMUs) are composed of proper efficient sample units instead of efficient DMUs. These sample units, which may or may not be the same as DMUs, can be selected by decision-makers according to their demand. The advantages of the G-IDEA models are as follows: (1) they can be applied to find the projections of pallet rental companies with real-valued and integer-valued variables on the efficient frontier; (2) they are able to help the decision-makers in inefficient pallet rental companies make a step by step efficiency improvement scheme. Particularly, we develop a non-oriented integer-valued DEA model with generalized reference sets (NG-IDEA). The NG-IDEA model can be used to figure out how to improve the performance of inefficient pallet rental companies by simultaneously decreasing inputs and increasing outputs. The proposed models are applied to the performance evaluation of ten pallet rental companies. The results of the case study prove the effectiveness of our models. Furthermore, some valuable suggestions on how to improve the efficiency of inefficient pallet rental companies are presented based on the results.

Keywords

• DEA
• reference set
• integer
• logistics
• pallet