Calculate the efficiencies of the restaurants

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Reference no: EM131163822

DEA Efficiency with an Additional Constraint Review Exercise. Add constraints that require virtual outputs of at least 10 percent.

(a) With the additional constraints, calculate the efficiencies of the restaurants. Comparing the original analysis, what patterns do you see?

(b) Repeat the analysis with a minimum of 20 percent on the virtual outputs.

Exercise:
Evaluating Restaurant Efficiency Celia's Tacqueria is a chain of five Mexican restaurants in Florida. A DEA evaluation is being conducted to make comparisons of the different locations. Input measures for the restaurants include weekly hours of operation, fulltime equivalent staff, and weekly supply expenses. Output measures of performance include average weekly contribution to profit, market share, and annual growth rate. Data for the input and output measures are shown in Table.

(a) Perform a DEA evaluation for this set of units, listing the efficiency and the virtual outputs for each of restaurants.

(b) For each of the inefficient units, find the reference set and calculate the inputs and outputs for a corresponding HCU.

Table. Inputs and Outputs for Five Restaurants

Restaurant	Input measures
Restaurant	Hours of operation	FTE staff	Supplies ($)
Jacksonville	96	16	850
Daytona	110	22	1400
Gainesville	100	18	1200
Ocala	125	25	1500
Orlando	120	24	1600
	Output measures
	Weekly profit ($)	% Market share	% Growth rate
Restaurant	Weekly profit ($)	% Market share	% Growth rate
Jacksonville	3800	25	8.0
Daytona	4600	32	8.5
Gainesville	4400	35	8.0
Ocala	6500	30	10.0
Orlando	6000	28	9.0

Reference no: EM131163822

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