sajm






Measuring Efficiency of Tea Retail Chain Stores: Application of Data Envelopment Analysis

Prasanth R Kumar , Silky Doda , P Janaki Ramudu and Lokanadha Reddy Irala

DOI: https://doi.org/10.62206/sajm.30.4.2023.81-101

PUBLISHED : 26 Feb 2024

Abstract

The paper aims to determine the technical efficiency of select beverage (tea) retail chain stores in India. Further, the study investigates the factors responsible for store inefficiency. Two Data Envelopment Analysis models: (i) Charnes, Cooper and Rhodes; (ii) Banker, Charnes and Cooper, were adopted to determine technical and pure technical efficiency of 75 retail tea beverage stores chain owned by a single firm, for two consecutive financial years. The variables comprise six inputs namely; number of employees, cost of labour, area of outlet, occupancy cost, other expenses and cost of inventory stock and two outputs, namely; sales and profit. The results showed that only three stores were found to be technically and overall technically efficient. The efficient frontiers of the CCR model are plotted on three stores, whereas 36 stores were plotted under the BCC model. The analysis concludes that inefficient stores could potentially control occupancy and labour overheads to attain optimum efficiency.

Key Words

Technical efficiency, Data envelopment analysis, Retail store

Author Biography

Prasanth R Kumar
Faculty, School of Management Studies, University of Hyderabad, Hyderabad, India; and is the corresponding author. E-mail: This e-mail address is being protected from spambots. You need JavaScript enabled to view it

Silky Doda
Student, National Institute of Food Technology Entrepreneurship and Management, Kundli, Haryana, India. E-mail: This e-mail address is being protected from spambots. You need JavaScript enabled to view it

P Janaki Ramudu
Professor, Institute of Management Technology, Nagpur, India. E-mail: This e-mail address is being protected from spambots. You need JavaScript enabled to view it

Lokanadha Reddy Irala
Faculty, School of Management Studies, University of Hyderabad, Hyderabad, India. E-mail: This e-mail address is being protected from spambots. You need JavaScript enabled to view it

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