Abstract
A multiple-input and multiple-output model for measuring the cost efficiency of postal delivery branches is proposed. We analyze the complete postal network of the Serbian post delivery offices, which includes 1,194 post office branches. To compare the branches that operate under the same or similar conditions, the branches are grouped into 18 clusters by implementing the appropriate clustering algorithm. This enables a three-level analysis: branches–clusters–network. The cost efficiency of the branches is measured using data envelopment analysis. The efficiency of a particular cluster is calculated as an average cost efficiency score of the branches that belong to this cluster, and finally, the efficiency of the postal delivery network is assessed. The distribution of cost efficiency scores per clusters takes values from 15 to 92 %. At the level of the total network, the cost efficiency is 40 %, which indicates that there are possibilities for improvement. To obtain more specific guidelines, that is, the decomposition of cost efficiency into pure technical efficiency, the scale efficiency and allocative efficiency were assessed for each cluster and for the total delivery network. This research is beneficial to policy makers defining the scope of universal service obligation and to company managers who want to optimize the postal network. For example, the results of this study indicate that, at a minimum, 794 delivery branches could improve their efficiency by resource reallocation.
This is a preview of subscription content, log in via an institution to check access.
Similar content being viewed by others
References
Aigner D, Lovell CAK, Schmidt S (1977) Formulation and estimation of stochastic frontier production function models. J Econ 6(1):21–37
Banker RD, Charnes A, Cooper WW (1984) Some models for estimating technical and scale inefficiencies in data envelopment analysis. Manag Sci 30(9):1078–1092
Borenstein D, Becker JL, Jose do Prado V (2004) Measuring the efficiency of Brazilian post office stores using data envelopment analysis. Int J Oper Prod Man 24(10):1055–1078
Cazals C, Dudley P, Florens JP, Patel S, Rodriguez F (2008) Delivery offices cost frontier: a robust nonparametric approach with exogenous variables. Rev Netw Econ 7(2):294–308
Cazals C, Florens JP, Simar L (2002) Nonparametric frontier estimation: a robust approach. J Econ 106(1):1–25
CERP (2008) Guidelines for calculating the net cost of the universal service obligations.http://www.cept.org/files/1049/documents/List%20of%20documents%20(history)/Guidelines%20Calculation%20net%20costs%20USO.pdf. Accessed 12 Sep 2014
Charnes A, Cooper WW, Rhodes E (1978) Measuring the efficiency of decision making units. Eur J Oper Res 2(6):429–444
Cobb S, Douglas P (1928) A theory of production. Am Econ Rev 18(1):139–165
Cohen JW (1988) Statistical power analysis for the behavioral sciences, 2nd edn. Lawrence Erlbaum Associates, Hillsdale
Cooper WW, Seiford LM, Tone K (2007) Data envelopment analysis: a comprehensive text with models, applications, references and DEA-solver software, 2nd edn. Springer, New York
Copenhagen Economics (2010) Main developments in the postal sector (2008–2010)—Study for the European Commission, Directorate general for internal market and services. http://ec.europa.eu/internal_market/post/studies/index_en.htm. Accessed 10 Sep 2014
Debreu G (1951) The coefficient of resource utilization. Econometrica 19(3):273–292
Deprins D, Simar L, Tulkens H (1984) Measuring labor-efficiency in post offices. In: Muchard M, Pestieau P, Tuklens H (eds) The performance of public enterprises: concepts and measurements. North Holland, Amsterdam, pp 243–268
Doble M (1995) Measuring and improving technical efficiency in UK post office counters using data envelopment analysis. Ann Public Coop Econ 66(1):31–64
European Commission (2014) http://ec.europa.eu/competition/state_aid/overview/public_services_en.html. Accessed 12 July 2014
European Union (1997) Directive 97/67/EC. http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:1998:015:0014:0025:EN:PDF. Accessed 10 July 2014
European Union (2002) Directive 2002/39/EC. http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2002:176:0021:0025:EN:PDF. Accessed 10 July 2014
European Union (2008) Directive 2008/06/EC. http://ec.europa.eu/internal_market/postdoc/legislation/2008-06_en.pdf. Accessed 10 July 2014
Fare R, Grosskopf S, Lovell CAK (1985) Measurement of efficiency of production. Kluwer, Boston
Farrell MJ (1957) The measurement of productive efficiency. J R Stat Soc Ser A (General) 120(3):253–290
Filippini M, Zola M (2005) Economies of scale and cost efficiency in the postal services: empirical evidence from Switzerland. Appl Econ Lett 12(7):437–441
Fried HO, Lovell CAK, Schmidt S (2008) The measurement of productive efficiency and productivity growth. Oxford, New York
Frontier Economics (2013) Study on the principles used to calculate the net costs of the postal USO— a report prepared for the European Commission. http://ec.europa.eu/internal_market/post/studies/index_en.htm. Accessed 10 Sep 2014
Gautier A, Paolini D (2010) Universal service financing in competitive postal markets: one size does not fit all. http://www2.ulg.ac.be/crepp/papers/crepp-wp201004.pdf. Accessed 30 June 2014
Horncastle A, Jevons D, Dudley P, Thanassoulis E (2006) Efficiency analysis of delivery offices in the postal sector using stochastic frontier and data envelopment analyses. In: Crew MA, Kleindorfer PR (eds) Liberalization of the postal and delivery sector. Edward Elgar, Cheltenham, pp 149–164
Iturralde JM, Quiros C (2008) Analysis of efficiency of the European postal sector. Int J Prod Econ 114(1):84–90
Koopmans TC (1951) Activity analysis of production and allocation, Cowles commission for research in economics monograph no. 13. In: Koopmans TC (ed) An analysis of production as an efficient combination of activities. Wiley, New York
Lovell CAK (1993) Production frontiers and productive efficiency. In: Fried AO, Lovell CAK, Schmidt SS (eds) The measurement of productive efficiency. Oxford, New York, pp 3–67
Maruyama S, Nakajima T (2002) Efficiency measurement and productivity analysis for Japanese postal service. Institute for Posts and Telecommunications Policy, Tokyo
Oxera (2007) Funding universal service obligations in the postal sector. http://www.oxera.com/Oxera/media/Oxera/Funding-the-USO-in-the-postal-sector.pdf?ext=.pdf. Accessed 29 June 2014
Quiros C, Picazo AJ (2001) Liberalización, eficiencia y cambio técnico en telecomunicaciones. Rev Econ Apl 9(25):77–113
Reig E, Picazo A, Hernandez F (2001) The calculation of shadow prices for industrial wastes using distance functions: an analysis for Spanish ceramic pavements firms. Int J Prod Econ 69(3):277–285
Serbian Post (2012) Company Profile 2011. Serbian Post, Belgrade
Shephard RW (1953) Cost and production functions. Princeton University Press, Princeton
The Postal Services Act of the Republic of Serbia (2005) http://www.posta.rs/dokumenta/lat/o-nama/administracija-izvestaji-dokumenta/zakon-o-postanskim-uslugama.pdf. Accessed 15 July 2014
Thomson Reuters Web of Science (2014) http://apps.webofknowledge.com. Accessed 25 January 2014
Tone K (2002) A strange case of the cost and allocative efficiencies in DEA. J Oper Res Soc 53(11):1225–1231
WIK-Consult (2013) Main developments in the postal sector (2010–2013)—study for the European Commission, Directorate general for internal market and services. http://ec.europa.eu/internal_market/post/studies/index_en.htm. Accessed 10 Sep 2014
Wright PM, McMahan GC (2011) Exploring human capital: putting human back into strategic human resource management. Hum Resour Manag J 21(2):93–104
Acknowledgments
This research was supported by the Serbian Ministry of Education, Science and Technological Development, project no. TR36022. The authors acknowledge two anonymous referees for their helpful comments and suggestions.
Author information
Authors and Affiliations
Corresponding author
Rights and permissions
About this article
Cite this article
Ralević, P., Dobrodolac, M. & Marković, D. Using a nonparametric technique to measure the cost efficiency of postal delivery branches. Cent Eur J Oper Res 24, 637–657 (2016). https://doi.org/10.1007/s10100-014-0369-0
Published:
Issue Date:
DOI: https://doi.org/10.1007/s10100-014-0369-0