An Integrated Analytic Hierarchy Process—Slack Based Measure-Data Envelopment Analysis Model for Evaluating the Efficiency of Logistics Service Providers Considering Undesirable Performance Criteria

• Main Authors: Patricija Bajec, Danijela Tuljak-Suban
• Format: Article
• Language: English
• Published: MDPI AG 2019-04-01
• Series: Sustainability
• Subjects: logistics service provider; LP; measuring efficiency; sustainable efficiency; data envelopment analysis; DEA; slack based measure; SBM; undesirable performance criteria
• Online Access: https://www.mdpi.com/2071-1050/11/8/2330

Sustainable concerns are reputed to be of the utmost priority among governments. Consequently, they have become more and more of a concern among supply chain partners. Logistics service providers (LPs), as significant contributors to supply chain success but also one of the greatest generator of emissions, play a significant role in reducing the negative environmental impact. Thus, the performance evaluations of LPs should necessarily involve such a measure which, firstly, represents a balance between all three pillars of sustainability and, secondly, consider the desirable and undesirable performance criteria. This paper proposes an integrated analytic hierarchy process (AHP) and slack-based measure (SBM) data envelopment analysis (DEA) model, based on the assumption of a variable return to scale (VRS). An AHP pairwise comparison enables selecting the most influential input/output variables. Output-oriented SBM DEA provides simultaneously evaluation of both the undesirable and desirable outputs. The proposed model was tested on a numerical example of 18 LPs. The comparison of output Charnes, Cooper and Rhodes (CCR) and SBM DEA models resulted in a higher number of inefficient LPs when the SBM DEA model was applied. Moreover, efficiency scores of inefficient LPs were lower in SBM DEA model. The proposed model is fair to those LPs that are environmentally friendly.