The Output Shows the Solution to a DEA Model Where

question 28

Essay

The output shows the solution to a DEA model where facilities in Seaview (S), Farmington (F), Lewiston (L), and San Domingo (D) are compared. The inputs, in order, are number of machines, size of work force, and goodness of location. The outputs, in order, are production, quality rating, and on-time completion percentage. The model examines the efficiency of Lewiston.
MIN
0S+0F+0L+0D+1E
S.T.
1) 1S+1F+1L+1D=1
2) 5S+22F+36L+15D−36E<0
3) 400S+1500F+3150L+1060D−3150E<0
4) 24S+13F+32L+17D−32E<0
5) 800S+2900F+1860L+1700D+0E>1860
6) 95S+92F+83L+94D+0E>83
7) 83S+85F+90L+91D+0E>90
OPTIMAL SOLUTION
Objective Function Value = 0.510
a.Is the Lewiston plant efficient? Why or why not? If not, which plants should it emulate in order to improve?
b.How much more production does the composite facility provide than the Lewiston site?
c.What is the quality rating for the composite facility?

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Definitions:

Sellers

Individuals or entities engaged in the act of selling or providing goods and services to consumers or other businesses.

Rationing Function

The ability of market prices to allocate scarce goods and services to those who are willing and able to pay for them.

Surplus Goods

Items for which the quantity supplied exceeds the quantity demanded, often leading to price reductions to clear excess inventory.

Competitive Market

A market where numerous sellers compete to sell their goods or services to a large number of buyers, promoting efficiency and innovation.