Developing an Output-Oriented Super Slacks-Based Measure Model with an Application to Third-Party Reverse Logistics Providers

Outsourcing is an increasingly significant topic pursued via corporations seeking enhanced efficiency. Third-party reverse logistics involves the employ of external firms to carry out some or all of the firm's logistics activities. Output-oriented super slacks-based measure (SBM) model is one of the models in data envelopment analysis (DEA). In many real-world applications, data are often stochastic. A successful approach to address uncertainty in data is to replace deterministic data via random variables, leading to chance-constrained DEA. In this paper, a chance-constrained output-oriented super SBM model is developed and also its deterministic equivalent, which is a nonlinear program, is derived. Furthermore, it is shown that the deterministic equivalent of the stochastic output-oriented super SBM model can be converted into a quadratic program. In addition, sensitivity analysis of the stochastic output-oriented super SBM model is discussed with respect to changes on parameters. Finally, a numerical example demonstrates the application of the proposed model. Copyright (C) 2011 John Wiley & Sons, Ltd.