Developing a step-by-step effectiveness assessment model for customer-oriented service organizations

• Published in: European journal of operational research 2012-11, Vol.223 (1), p.226-233
• Main Authors: Brissimis, Sophocles N., Zervopoulos, Panagiotis D.
• Format: Article
• Language: English
• Subjects: Applied sciences; Assessments; Context-dependent DEA; Data envelopment analysis; Data Envelopment Analysis (DEA); Decision theory. Utility theory; Drivers; Effectiveness; Efficiency; Exact sciences and technology; Markets; Mathematical models; Mathematics; Nonparametric inference; Operational research; Operational research and scientific management; Operational research. Management science; Operations research; OR in service industries; Perceived quality; Probability and statistics; Production equilibrium; Sciences and techniques of general use; Service industries; Stability; Statistics; Studies
• ISSN: 0377-2217; 1872-6860
• DOI: 10.1016/j.ejor.2012.06.003

► We develop a comparative effectiveness assessment model, called MQE-DEA. ► The MQE-DEA model incorporates efficiency and perceived quality. ► The MQE-DEA model respects short-run production constraints. ► The model is applied when a trade-off exists between the dimensions of effectiveness. ► The model’s application yields perceived quality-driven production equilibria. Effectiveness involves more than simple efficiency, which is limited to the production process assessment of peer operational units. Effectiveness incorporates variables that are both controllable (i.e. efficiency) and non-controllable (i.e. perceived quality) by the operational units. It is a fundamental driver for the success of either a for-profit or a non-for-profit unit in a competitive environment that is customer/citizen- and goal-oriented. Additionally, with respect to the short-run production constraints, i.e. the resources available and controllable by the operational units, and the legal status, we go beyond the traditional effectiveness assessment techniques by developing a Modified or “rational” Quality-driven-Efficiency-adjusted Data Envelopment Analysis (MQE-DEA) model. This particular model provides in the short run a feasible effectiveness attainment path for every disqualified unit in order to meet high-perceived quality and high-efficiency standards. By applying the MQE-DEA model a new production equilibrium is determined, which is different from the equilibrium suggested by the mainstream microeconomic theory, in that it takes into account not only the need for operational efficiency but also the customer-driven market dynamics.