Evaluation and Improvement of the Efficiency of Logistics Companies with Data Envelopment Analysis Model

Authors

  • Pei Fun Lee Universiti Tunku Abdul Rahman (UTAR)
  • Weng Siew Lam Universiti Tunku Abdul Rahman (UTAR)
  • Weng Hoe Lam Universiti Tunku Abdul Rahman (UTAR)

DOI:

https://doi.org/10.4186/ej.2021.25.6.45

Keywords:

data envelopment analysis, efficiency, linear programming model, potential improvement

Abstract

The performance of global trade depends on the logistics industry to move products, information, finances, technology and human resources along the supply chain. The current situation during the pandemic relies on the logistics industry particularly in the courier, parcel and express service providers to deliver daily essentials. Product customization, customer demand, technological sophistication, threat of new entrants, border closure, compliance to Covid-19 regulations and global economic crisis have taken the logistics industry by storm. For the sustainment and growth of these companies, strategic decision making shall take place. A huge determinant of these decisions is the financial efficiency of the companies. Therefore, this paper aims to determine the efficiency of the logistics companies in Malaysia by analyzing their financial performances using current ratio, debt to assets ratio, debt to equity ratio, earnings per share, return on assets and return on equity with data envelopment analysis model. The results of this study found that five companies, COMPLET, GDEX, MISC, SURIA and WPRTS are efficient. This study fills the research gap by determining the efficiency scores of these companies and suggesting potential improvements for inefficient companies to enhance and optimize their financial positions.

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Author Biographies

Pei Fun Lee

Department of Physical and Mathematical Science, Faculty of Science, Universiti Tunku Abdul Rahman, Kampar Campus, Jalan Universiti, Bandar Barat, 31900 Kampar, Perak, Malaysia

Weng Siew Lam

Department of Physical and Mathematical Science, Faculty of Science, Universiti Tunku Abdul Rahman, Kampar Campus, Jalan Universiti, Bandar Barat, 31900 Kampar, Perak, Malaysia

Weng Hoe Lam

Department of Physical and Mathematical Science, Faculty of Science, Universiti Tunku Abdul Rahman, Kampar Campus, Jalan Universiti, Bandar Barat, 31900 Kampar, Perak, Malaysia

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Published In
Vol 25 No 6, Jun 30, 2021
How to Cite
[1]
P. F. Lee, W. S. Lam, and W. H. Lam, “Evaluation and Improvement of the Efficiency of Logistics Companies with Data Envelopment Analysis Model”, Eng. J., vol. 25, no. 6, pp. 45-54, Jun. 2021.