Relative Efficiency Measurement of Enterprises Operating in the Oltu Stone Industry Using Data Envelopment Analysis

Emrah Talas, Ali Kemal Çelik, Fatih Çakmak, Fatma Aydan Kocacan, Adnan Karaibrahimoglu

Abstract


The city of Erzurum is emerging as one of the most popular jewelry centers in Turkey, principally due to its
possession of mines for precious stones, and in particular for Oltu stone. Oltu stone is paramount to the
international image of the city, and its contribution to the local and national economy is significant. Although
recent studies have underscored the enormous potential of the Oltu stone industry, it is encumbent on the
enterprises concerned to use their resources effectively and efficiently in order to reduce their costs, and they are
also advised to improve service quality and thus satisfy customer needs more closely. With these aims in mind,
Data Envelopment Analysis provides a convenient statistical technique that enables the analyst to measure the
relative efficiencies of enterprises. This linear-programming-based technique can be used to identify suggestions
for improvement with the goal of achieving greater efficiency. This paper uses Data Envelopment Analysis to
perform a relative efficiency analysis of enterprises operating in the Oltu stone industry and presents alternatives
whereby inefficient enterprises may become more efficient. The paper makes use of output-oriented CCR and
BCC models to specify the scenario by calculating three different efficiency scores.

Full Text: PDF DOI: 10.5539/ijbm.v8n6p115

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International Journal of Business and Management   ISSN 1833-3850 (Print)   ISSN 1833-8119 (Online)

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