An efficiency-driven approach for setting revenue target

This paper addresses the efficiency measurement and revenue setting problems drawn from a home improvement company with 22 chain stores in Taiwan. The top management attaches great importance to efficiency analysis of their stores. Furthermore, when the proposal to establish a new store is under development, the regional manager must determine what efficiency level the new store should achieve and what amount of business revenue it should earn. An approach by using the imprecise DEA (IDEA) and inverse IDEA models as core techniques is proposed to deal with such problems. A simulated application illustrates the implementation of the proposed approach. (C) 2010 Elsevier B.V. All rights reserved.