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Nonparametric Model for Business Performance Evaluation in Forestry (CROSBI ID 51225)

Prilog u knjizi | izvorni znanstveni rad

Šporčić, Mario ; Landekić, Matija Nonparametric Model for Business Performance Evaluation in Forestry // Computational and numerical simulations / Awrejcewicz, Jan (ur.). Rijeka: IntechOpen, 2014. str. 451-475

Podaci o odgovornosti

Šporčić, Mario ; Landekić, Matija

engleski

Nonparametric Model for Business Performance Evaluation in Forestry

Determination of efficiency has become increasingly important in many areas of human activity. Approach to this problem is particularly interesting when there are no clear success parameters, and when the efficiency of using several different resources/inputs is measured for achieving several different outputs. In such measurements, we are always interested in determining the degree of efficiency of individual organisations, institutions, associations, etc. in relation to others acting under similar conditions. In doing so, the compared objects are presented through data on used resources/inputs and data on achieved outputs. In forestry, the determination of efficiency of forestry companies is extremely complex because of multiple goals of forest management. The principle of sustainable development represents the management and use of forests and forest land in the way to preserve their biological diversity, productivity, regeneration capability, vitality and potential in order to enable forests to fulfil now and in future their key economic, ecological and social functions. The above stated makes the conditions of forest management increasingly demanding and imposes the necessity of continuous analyses of all relevant business performance indicators. In the last few decades, forest management has been focused on multifunctional use and general benefits of forests. Due to multiple benefits and advantages offered by forests, as well as the non-market nature of a part of these outputs, the measurement of performance in forestry is highly demanding. In such conditions, it is pretty difficult to apply conventional economic methods, such as cost-benefit analysis, internal rate of return and others for determining business success. The right evaluation method must be selected in order to determine whether the resources are used efficiently. Taking into consideration multiple inputs and multiple outputs of forest management, in this paper Data Envelopment Analysis (DEA) was applied for determining the performance level of forest management units. DEA represents a methodology suitable for the efficiency analysis of numerous production units, but is not traditionally used in forestry. Although it was first applied in the forestry sector in 1986, the number of papers based on measuring the performance by non-parametric techniques, such as DEA, is still very limited in forestry literature. The basic idea is to determine the performance through the efficiency level of individual DMUs based on the relationship between a complex input and a complex output. Data Envelopment Analysis, as the technique for measuring productivity and efficiency, is widely applied in many areas. It was used, for example, for making comparisons between organisations, companies, regions and countries . For determining business performance it was applied in banking, agriculture, wood industry, schooling , etc. In DEA bibliography there are approximately 3.200 published DEA papers. However, in the area of management of renewable natural resources, it is still not sufficiently present. In forestry literature there is only a limited number of DEA papers, and it yet has to be introduced and accepted in forestry as a management tool at a strategic and operating level of decision making. So, this paper assesses the efficiency of basic organizational units in the Croatian forestry, forest offices, by applying Data Envelopment Analysis (DEA), a nonparametric methodology for measuring relative efficiency of comparable decision making units with more inputs and outputs. The relative efficiency of compared forest offices is calculated in the paper with the most frequently used DEA models - CCR and BCC model. According to the aquired data, conducted calculations and analysis the results of global technical efficiency (obtained by CCR model), local pure technical efficiency (obtained by BCC model) and scale efficiency were determined. The results also included the calculation of efficiency frontier, frequency of efficient units in reference set of inefficient units, determination of sources and values of inefficiencies, influence of the forest offices' structural characteristics on their efficiency and the average efficiency of forest offices grouped with respect to the forest administrations and regions they belong to. The research reveals DEA as a powerful multi criteria decision making tool and a possible, very valuable support in forest management.

forestry, forest management, efficiency, multi criteria decision making, DEA

DOI: 10.5772/57042

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Podaci o prilogu

451-475.

objavljeno

Podaci o knjizi

Computational and numerical simulations

Awrejcewicz, Jan

Rijeka: IntechOpen

2014.

978-953-51-1220-4

Povezanost rada

Šumarstvo