A New Expansion on Multi-Stage DEA Methodology in Supply Chain Management

Data envelopment analysis is the tool for computation in decision making units such as supply chain. Since the model of two-stage data envelopment analysis has more focused on supply chain processes in two levels; the evaluation in higher levels has been essential to obtain more accurate efficiency. This paper extends Wang & Chin (2010) model into three levels for evaluation the supply chain to show the importance of integration in the overall supply chain. The model is considered the extended two-stage DEA model of Koa and Hwang(2008) to variable returns to scale (VRS) assumption and the additive efficiency decomposition model of Chen (2009) generalized to taking into account the relative importance weights of two individual stages. The presented model is executed in numerical illustration and the results are analyzed in tables.