Quality-driven profitability analysis in service operations

Service quality is one of the crucial factors for service providers to improve on their performance and enhance competitiveness in service operations. Service providers have been investing significant financial, material, and human resources to enrich service quality with an aim to promote profit generation. This study presents a two-stage network DEA model employing the relations among costs, service quality, and profit in evaluating performance. It also shows how efficiently costs contribute to performance in favor of service quality and how efficiently service quality provision contributes to performance in favor of profit generation. This study also demonstrates a case study involving 32 Korean university hospitals with real-world data and provides rich experiment results to address the effectiveness and applicability of the proposed model incorporating service quality in the service operations industry.

Automated summary

Service quality is a crucial factor for service providers to enhance competitiveness, with significant investments made to enrich service quality and promote profit generation. This study introduces a two-stage network DEA model to evaluate performance through the relationships among costs, service quality, and profit. Findings demonstrate the important contributions of cost efficiency and service quality provision to performance and profit generation in the service operations industry.