Efficiency of Iranian forest industry based on DEA models

Abstract

Data Envelopment Analysis (DEA) is a mathematical technique to assess relative efficiencies of decision making units (DMUs). The efficiency of 14 Iranian forest companies and forest management units was investigated in 2010. Efficiency of the companies was estimated by using a traditional DEA model and a two-stage DEA model. Traditional DEA models consider all DMU activities as a black box and ignore the intermediate products, while two-stage models address intermediate processes. LINGO software was used for analysis. Overall production was divided into to processes for analyses by the two-stage model, timber harvest and marketing. Wilcoxon’s signed-rank test was used to identify the differences of average efficiency in the harvesting and marketing sub-process. Weak performance in the harvesting sub-process was the cause of low efficiency in 2010. Companies such as Neka Chob and Kelardasht proved efficient at timber harvest, and Neka Chob forest company scored highest in overall efficiency. Finally, the reference units identified according to the results of two-stage DEA analysis.

Keywords

traditional DEA model / two-stage DEA model / Iranian forest industries / harvesting sub-process / marketing sub-process