Assessing the logistics efficiency of European countries by using the DEA-PC methodology

Abstract

Data envelopment analysis is a non-parametric linear programming method widely used for the efficiency evaluation of decision making units active in the transport sector. However, it is seldom applied for the efficiency assessment of logistics efficiency at a macro level. The article presents such an example which is at the same time the very first application of a lately developed methodology where data envelopment analysis is combined with analytic hierarchy process to yield an appropriate tool for efficiency evaluation with full ranking. The logistics efficiency of 29 European countries is tested with the new DEA-PC (pairwise comparison) methodology while it is also compared with the results gained with the original DEA method. Furthermore, the outcomes are also evaluated in light of the ‘Logistics quality and competence’ index of the Logistics Performance Indicator (LPI), a major international survey into the logistics competence of countries. Thus, the results of traditional DEA and DEA-PC are both weighted against survey data which is also a novelty in the logistics sector.

Keyword : DEA, AHP, DEA-PC, logistics, efficiency, performance