Evaluation of cost-effectiveness and cost efficiency of network systems Case study: Bank branches

Document Type : Original Article

Authors

1 Department of Mathematics, University of Sistan and Baluchestan, Zahedan, Iran

2 Department of Mathematics, University of Sistan and Baluchestan‎, ‎Zahedan‎, ‎Iran

Abstract

Effectiveness of the organization and its economic evaluation is one of the most effective factors for the success of managers in the progress and development of organizations. The banking industry is the most important sectors in any economic system. The banking system for economic financing must have an efficient and effective performance. In this paper, we proposed a new model for evaluating cost efficiency and effectiveness, with considering the interaction and relationship between the internal departments of the bank branches, which is able to determine how to make optimal use of available resources in each section. We analyze the features of the proposed model, also the effect of the relationship between the sections on cost effectiveness is determined. In this model, the relationship between the sections is examined in two modes, free and fixed communication; we have used the proposed model to determine the efficiency and cost-effectiveness of 26 branches of a commercial bank in Iran, in two state, constant return to scale (CRS) and variable return to scale (VRS) and comparison of the results of the two state is presented. The results show that a branch that is cost-effective in both section, it will not necessarily be cost-effective. In addition, this model can provide more accurate information to managers to make decisions by identifying ineffective factors in bank branches.

Keywords

References

 [1] Chang, K.C., Lin, C.-L., Cao, Y., Lu, C.-F., Evaluating Branch Efficiency of a Taiwanese Bank Using Data Envelopment Analysis with an Undesirable Factor, African Journal of Business Management, 5(8), 2011, 3220-3228.
 [2] Camanho‌, ‌A.S. Dyson‌, ‌R.G‌. ‌Cost efficiency‌, ‌production and value-added models in the analysis of bank branch performance‌. Journal of Operational Research Society, 56‌, ‌2005, 483- ‌494‌.
[3] Thanassoulis,E., Portela, M.C.S., Despic, O., Data envelopment analysis: the mathematical programming approach to efficiency analysis. In H.O, 2008.
[4] Fukuyama‌, ‌H.‌, Khanjani Shiraz‌, R‌. ‌Cost-effectiveness measures on convex and non-convex technologies‌. European Journal of Operational Research‌, 246 (1)‌, ‌2015, 307–319‌.
[5] Hejazi. R., Anvari rostami, A., Moghadasi, M., Total productivity analysis of export development bank of Iran and productivity growth in branches: a data envelopment analysis application, Jornal of industrial management (management knowledge), 1, 2008, 39-50.
[6] Mehrabiyan,S.,Saati,S., Hadi,A., efficiency Assessment in Eghtesad Novin Bank Branches Using Hybrid of Artificial Neural Network and Data Envelopment Analysis. Journal of Operational Research in Its Applications 8, 4, 2011, 29-39.
[7] Usefi, SH.,Fahimi,M.,Mohammadi,D., Abdollahzadeh, A.A., Evaluation of Performance Branches of Melat Bank Using Hybrid Techniques DEA/AHP. Journal of Operational Research in Its Applications 11,3, 2014, 109-123,.
[8] Azar,A.,Zarei Mahmoudabadi, M., Moghbel,A., Khadivar, A., Evaluating the Productivity of a Bank's Branches Using Network Data Envelopment Analysis Approach(Case Study:A Bank in Guilan Province). Journal of Monetary and Banking Research, 7, 20, 2014, 285-305.
[9] Hemati M., Abbasi S. Representing a Multi-Step Technique of the Common weights and TOPSIS in order to Ranking of Units, Modern Researches in Decision Making, 1, 2, 2016, 193-215.
[10] Ramazanian, M.R., Yakideh, K., Akhavan Deilami, L, Investigation of bank management performance using DEA technique (case study of different branches of Tehran Banks), Journal of Productivity Management, 13,49, 2019, 123-144.
[11] Wang, K., Huang, W., Wu, J., Liu, Y. N., Efficiency Measures of the Chinese Commercial Banking System Using an Additive Two-Stage DEA. Omega, 44, 2014, 5-20.
[12] Wu, Y., Ting, I., Lu, W., Nourani, M., Kweh, Q., The impact of earnings management on the performance of ASEAN banks. Economic Modelling, 53, 2016, 156-165.
[13] Moreno, P. & Lozano, S.. Super SBI Dynamic Network DEA approach to measuring efficiency in the provision of public services. International Transactions in Operational Research, 2016, 1-21.
 [4] Fukuyama, H., Weber, W.L., Japanese bank productivity, 2007-2012: A dynamic network approach. Mimeo, 22, 4, 2016, 649-676
[15] Fukuyama, H., & Matousek, R., Modelling Bank Performance: A Network DEA Approach, European Journal of Operational Research, 259(2), 2016, 721-732
[16] Nikneshan M., A. , S. Designing Multilevel Assessment model to evaluate science and technology parks using DEA, Modern Researches in Decision Making, 3(4) 2019, 201-222.
[16] Hamidi, N., Fazli S., Akbari R., Identifying Inefficient Bank Branches Using DEA and Use of Integrated Strategies in Order to Increase Performance Branches. IQBQ,. Management Research in Iran, 15 (3), 2011, 87-103.
[17] Nobahar E, Azar A. Developing a Performance Evaluation Model for Bank Branches Using a Hybrid Approach of Pca and Dea: Case of Third Level Branches of Keshavarzi Bank. ORMR, Management Research in Iran, 5 (3), 2015, 1-22. (In Persian)
[18] Taghavifard, M.T., Amiri. M., Mozafari, R., Measuring the Managerial Efficiency of Bank Branches: A Three-Stage DEA Analysis (In Melli Bank of Iran), Modern Researches in Decision Making, 2(1), 2017,52-71.
[20] Cooper W.W, Seiford L., Tone K, DATA ENVELOPMENT ANALYSIS: A Comprehensive Text with Models, Applications, References and DEA-Solver Software, 2007, Springer.
[21]   Kao‌, ‌C.‌, Hwang‌, ‌S.N‌., ‌Efficiency decomposition in two-stage data envelopment analysis‌: ‌An application to non-life insurance companies in Taiwan‌. European Journal of Operational Research‌, 185(1) ‌, ‌2008, 418‌- ‌429‌.
[22] Chen‌, ‌Y.‌, ‌Cook‌, ‌W.D.‌, ‌Li‌, ‌N.‌, Zhu‌, ‌J‌., Additive efficiency decomposition in two-stage DEA‌. European Journal of Operational Research, 196(3)‌, ‌2009, 1170-1176‌.
[23] Khaleghi, M. & Jahanshahloo, G., Zohrehbandian M. and Lotfi, F. H., Return to scale and scale elasticity in two stage DEA, Mathematical and Computational Applications, 17, 3, 2012, 193-202.

Files

Share

How to cite

Statistics