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?

---

Definitions:

Percentage Increase

A measure of how much a quantity has grown relative to its original value, expressed as a percentage.

Sales Data

Information that represents the quantity sold and revenues generated from goods or services over a certain period of time.

Vertical Analysis

A financial analysis method that lists each account on the financial statements as a percentage of a base number.

Gross Profit Margin

A financial metric that measures the difference between revenue and cost of goods sold (COGS), expressed as a percentage of revenue.