Performance Evaluation of An Apparel Retailer's Stores by Using Stochastic Imprecise DEA

Abstract

In today's competitive environment evaluating firms' performance is an important issue not only for investors and creditors but also for the stores of the firms to increase their efficiencies and take place in the sector. Determining the competitiveness of the firms and evaluating the financial performance of them is also crucial for the sector's development and this depends on their stores' performances. The aim of this study is developing a data envelopment analysis model to evaluate the performance of the stores of a well-known apparel retailer in Turkey. In conventional data envelopment analysis models, a performance measure whether as an input or output usually has to be known. However, in some cases, the type of a performance measure is not clear and we may not decide on whether the criteria is input or output which is called flexible measure. In addition to this, we believe that future planning is more important than past evaluation, so that we present a stochastic imprecise DEA model (SIDEA) that incorporates future planning with flexible measures. To document the practicality of this proposed model SIDEA, it is applied on a well-known apparel retailer in Turkey and get insights on the performance of the stores of this retailer.