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A Strategy for benchmarking of BEST with the rest of SRTUs: Data Envelopment Analysis Application

Authors: Adarsh Poojary, Chetan Panse

Journal: TEST Engineering & Management

Publication date: 2020 May / June

Publisher: TEST Engineering & Management

URL: click here


Abstract:

The economic growth of a developing country is mostly dependent on performance of its transport sector. Developing economy leads to increasing opportunities of jobs among the working class and migration of people from the rural areas to themetro areas. Hence government sponsored road transport has a detrimental role in transportation of passengers as a support network. This paper explores the efficacy of India's State Transport Undertakings, in particular Brihanmumbai Electricity Supply and Transport (BEST), using the Data Envelopment Analysis (DEA) and Regression Analysis techniques. For the study a data collection of 46 Indian State Transport Undertakings was found. DEA has been applied for measuring the efficiencies of the units being tested. Potential changes were measured for the inefficient units in the input and output variables. BEST has been found to be among the worst performers (rank 36). It displayed a score of 0.7883 indicating performance. Therefore, BEST needs to significantly improve its performance in order to reach an efficiency level. It is also not making optimum use of its capital, because it needs to increase/decrease all its inputs as well as outputs. In other words, BEST currently is not able to make optimum use of its resources as are its productive peers. This research paper tries to implement non-parametric Data Envelopment Analysis methodology which can help BEST decision-makers to identify the bottlenecks where changes are needed and prepare a plan of action to enhance BEST’sfunctioning. This will make BEST to turn from loss making to profit incurring state transport undertaking.