Journal of Korean Society for Quality Management (품질경영학회지)

Korean Society for Quality Management (한국품질경영학회)
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The Cost Efficiency Analysis of JeollaNamdo Food Industry

전라남도 식품업체의 비용 효율성 분석

  • Qing, Cheng Lin (College of Business Administration, Honam University) ;
  • Na, JuMong (College of Economic Administration, Chonnam University) ;
  • Chang, Seog Ju (College of Business Administration, Honam University) ;
  • Im, Chang Uk (College of Business Administration, Honam University)
  • Received : 2015.09.08
  • Accepted : 2015.11.23
  • Published : 2015.12.31
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Abstract

Purpose: The purpose of this study is to analyze the cost efficiency of food industry in JeollaNamdo. And this study is focused on the correlation between the economic efficiency of food industry and its cost efficiency, based on the analysis of 372 food companies' data in JeollaNamdo in 2012. Methods: DEA cost minimization is the measurement of the cost efficiency of JeollaNamdo food industry in 2012. In this study, the CCR and BBC models have been employed to analyze the decomposing cost efficiency-technical efficiency, allocative efficiency, and scale efficiency respectively. And the Spearman rank correlation and Wilcoxon signed rank test also have been employed to check the correlation and difference between the ranking orders based on the efficiency scores respectively. Results: For the CCR model, mean cost efficiency was found to be 0.084(0.54 for allocative efficiency and 0.19 for technical efficiency). For the BCC model, mean cost efficiency was found to be 0.252(0.453 for allocative efficiency and 0.564 for technical efficiency). Average scale efficiency was found to be 0.38. In analyzing the results, this study argues that the optimal way to improve cost efficiency is by reducing inputs proportionally and changing their combination. Conclusion: The efficiency scores of the two models show high correlation, whereas, the differences between them are also found to be significant. Hence, it should be cautious to select a suitable model when we do the research.

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References

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