A new model in determining capacity utilization based on efficiency, cost, price and distinction the loss of profit due to capacity utilization and inefficiency

In this paper, the combined model for determining capacity utilization by considering inputs and outputs based on efficiency is discussed and the loss due to the lack of suitable use of capacity utilization is also calculated.

The current research is practical in terms of the type of purpose and fundamental in terms of the type of study. The capacity utilization evaluation method is based on data envelopment analysis model which is suitable for evaluating efficiency and function and it also has the ability to designate the capacity utilization. In the present models, the capacity utilization evaluation method is stated by assuming the possibility of changing all inputs/outputs with a multiplicative constant (Radial model) or assuming a distinct change in all factors affecting production. But in reality, some inputs/outputs might change radially and some of them non-radially in organizations and companies. In this article, a new model is submitted to designate the capacity utilization. It measures the capacity utilization simultaneously in the presence of radial and non-radial factors; furthermore, it has the ability to detect losses caused by any of the items such as the price of outputs/inputs or amount of output deficit and input surplus and it is a suitable model for evaluating the capacity utilization in practical and real issues.

The proposed approach in this article combines the points of the CCR radial model and the SBM non-radial model with the aim of determining capacity utilization and not just measuring efficiency, and with its help, we can evaluate the capacity utilization with the presence of non-radial data in addition to the radial data. In a case study of twelve hospitals with a fixed input of a doctor, and a variable input of a nurse and two outputs of outpatients and inpatients, it was observed that by eliminating the variable inputs in the presence of radial and non-radial outputs, there is no improvement in efficiency. On the other hand, the results show that some hospitals should improve the use of their capacity, and in some hospitals, by increasing the number of nurses, the number of outpatients or inpatients can be increased and the performance of hospitals can be improved. Then, using efficiency analysis, the inefficiency factor and its amount were determined. The combined model shows a lower number of inefficient units than the output-oriented BCC model.

Originality/Value:

 In this article, the combined model of capacity utilization in the presence of radial and non-radial indicators is presented, which can be an introduction to the presentation of DEA models of capacity utilization under different input and output conditions.