The assessment of retailing efficiency using network data envelopment analysis
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abstract
This paper describes a method for the assessment of retail store performance based on
Data Envelopment Analysis (DEA). The assessment considers the stores as complex organizations that aggregate several subunits, corresponding to sections with management autonomy. This structure motivated an analysis at two different levels: the section level and
the store level. The performance assessment of the sections involves a comparison among
similar sections located in different stores, and evaluates efficiency spread. This is followed
by an analysis at the store level to define targets for the sections. This analysis takes into account the interdependencies of the sections composing a store, as they share limited resources
such as the floor area. This is achieved using a Network DEA model, which determines the
maximum store sales allowing for reallocations of area among the sections within a store.
The method developed is illustrated using a case study consisting of a Portuguese chain of
supermarkets.
