Production efficiency of agribusiness units: an application of the non-parametric data envelopment analysis (dea) method

Abstract

To aid companies in measuring the efficiency of their production process and to analyze their competitive positioning in the market, this article presents and discusses a methodology for organizational analysis and performance evaluation. A non-parametric method (DEA – Data Envelopment Analysis) is used to analyze the relative performance of eleven goat milk producers from Minas Gerais and Rio de Janeiro, based on information concerning multiple inputs and final products. These data cover the period from September of 2004 to September of 2005. With this methodology it is possible to analyze how each DMU (Decision Making Unit) may combine its inputs to achieve outputs. To develop the methodology, the CRS model (Constant Returns to Scale), with input orientation, was used. The results showed that inherent inefficiencies were related to the use of excessive inputs, which could be reduced without altering the production level.