You are presented with a DEA model for a bus service that carries both frieght a

Question

You are presented with a DEA model for a bus service that carries both frieght and passengers in 8 cities. The inputs used are labor hours and dollars spent on the facility and the outputs are ticket and freight sales. The following inputs were used in the building of the model:

Which of the depots currently has the largest excess facility spending?

A.) Richmond

B.) Jacksonville

C.) Baltimore

D.) Savannah

The following two graphics are to be used to answer this question Inputs Labor Facility Dollars Outputs Ticket Sales Freight Sales Input-Oriented CRS Sum of lambdas Optimal Lambdas with Benchmarks DMU NO. DMU Name Efficiency RTS Philadelphia 2 Baltimore 3 Washington 4 Richmond 5 Raleigh 6 Charleston 7 Savannah 8 Jacksonville 1.00000 1.000 Constant1.000 Philadelphia 0.873910.913 Increasing 1.00000 .90213 0.979 Increasing 000001.000 Constant1.000 Raleigh 0.89362 1.064 Decreasing 1.00000 0.571431 0.429 Increasing 0.717 Washington 0.196 Savannah 1.000 Washington 0.596 Washington 0.085 Raleigh 0.298 Savannah 0.213 Washington 0.745 Raleigh 0.106 Savanna Savannah Raleigh 4 1.000 0.143 0.286 Savannah Inputs Labor Facility Dollars Outputs Ticket Sales Freight Sales

Explanation / Answer

Jaksonville has the largest excess facility spending because its efficiency is very low. Efficiency is a measure of the productiveness of the facility.

Lower the efficiency higher the facility spending.   

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