The Output Shows the Solution to a DEA Model Where $0 \mathrm {~S} + 0 \mathrm {~F} + 0 \mathrm {~L} + 0 \mathrm { D } + 1 \mathrm { E }$

question 31

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 $0 \mathrm {~S} + 0 \mathrm {~F} + 0 \mathrm {~L} + 0 \mathrm { D } + 1 \mathrm { E }$
S.T. 1) $1 \mathrm {~S} + 1 \mathrm {~F} + 1 \mathrm {~L} + 1 \mathrm { D } = 1$
2) $5 \mathrm {~S} + 22 \mathrm {~F} + 36 \mathrm {~L} + 15 \mathrm { D } - 36 \mathrm { E } < 0$
3) $400 \mathrm {~S} + 1500 \mathrm {~F} + 3150 \mathrm {~L} + 1060 \mathrm { D } - 3150 \mathrm { E } < 0$
4) $24 \mathrm {~S} + 13 \mathrm {~F} + 32 \mathrm {~L} + 17 \mathrm { D } - 32 \mathrm { E } < 0$
5) $800 \mathrm {~S} + 2900 \mathrm {~F} + 1860 \mathrm {~L} + 1700 \mathrm { D } + 0 \mathrm { E } > 1860$
6) $95 \mathrm {~S} + 92 \mathrm {~F} + 83 \mathrm {~L} + 94 \mathrm { D } + 0 \mathrm { E } > 83$
7) $83 \mathrm {~S} + 85 \mathrm {~F} + 90 \mathrm {~L} + 91 \mathrm { D } + 0 \mathrm { E } > 90$
OPTIMAL SOLUTION
Objective Function Value = 0.510 $$\begin{array} { c c c } \text { Variable } & \text { Value } & \text { Reduced Cost } \\\text { S } & 0.000 & 0.385 \\\text { F } & 0.167 & 0.000 \\\text { L } & 0.000 & 0.490 \\\text { D } & 0.833 & 0.000 \\\text { E } & 0.510 & 0.000\end{array}$$ $$\begin{array} { c c c } \text { Constraint } & \text { Slack/Surplus } & \text { Dual Price } \\1 & 0.000 & 1.365 \\2 & 2.208 & 0.000 \\3 & 474.479 & 0.000 \\4 & 0.000 & 0.031 \\5 & 40.000 & 0.000 \\6 & 10.667 & 0.000 \\7 & 0.000 & - 0.021\end{array}$$
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:

Semiannual Interest

Interest that is calculated and paid twice a year, often on bonds or loans.

Subsidiary Company

A company that is completely or partly owned and wholly controlled by another company, known as the parent company.

Parent Company

A corporation that has control over one or more subsidiary companies, usually by owning a significant portion of their stock.

Fair Value

The predicted cost at which a property can be purchased or sold in a present deal between agreeable participants.