Scale Elasticity of Two-stage Processes under Meta and Group Frontiers

In many cases, entities with two-stage structures have different technologies. Furthermore, by estimating scale elasticity, organizations can assess whether they are operating at an optimal scale or if they are operating above or below their optimal scale. This helps identify potential inefficiencies and opportunities for improvement. Accordingly, this study presents a DEA-based approach to address scale elasticity of two-stage processes under meta and group frontiers. For this purpose, the group and meta performance of general systems and stages is measured. Then, the scale elasticity of two-stage processes is addressed considering technology heterogeneity. To accomplish this, the right and left scale elasticity of efficient general systems along with each stage is addressed. A numerical example is used to illustrate the suggested model.

Keywords:

Scale elasticity , Two-Stage Processes , DEA , Meta-Frontier