Multicomponent efficiency measurement and core business identification in multiplant firms: A DEA model

Performance modelling, across a set of similar decision making units (DMUs), has generally been directed toward the derivation of a single measure of efficiency. Data envelopment analysis (DEA) is often a tool of choice in arriving at such a measure. In the current paper, performance is viewed from a multi-functional perspective, with the ultimate goal being to identify for each DMU, the function or component of the business that should be deemed that DMUs core business. We present a modified version of the DEA model to accommodate this core business selection. The model is applied to a set of manufacturing plants in the steel molding and sheet steel industry. (C) 2003 Elsevier B.V. All rights reserved.