Three Echelon Supply Chain Performance measurement by Data Envelopment Analysis

A resourceful performance measurement system is an important tool for the effective management of a supply chain. Due to the existence of the intermediary measures connecting the chain members, common data envelopment analysis (DEA) is not efficient to measure the performance of the chain. In this paper several DEA-based approaches are developed for measuring the chain efficiency where intermediate measures are incorporated into the performance evaluation. The models are illustrated in a seller-distributor-buyer supply chain context. Non-linear programming is developed to solve these models and it is shown that these nonlinear programs can be treated as parametric linear programs, therefore, best solutions can be obtained through a heuristic technique. Numerical examples are used to demonstrate the approaches.