Application of Transformed Two-Stage Network DEA to Strategic Design of Biofuel Supply Chain Network

This paper proposes an innovative procedure for designing efficient biomass-biofuel logistics networks(BBLNs).This procedure is based on the two-stage network data envelopment analysis(TSN-DEA)models that have been developed to provide specific process guidance for the managers to improve the efficiency of the decision-making unit(DMU)with the TSN process.The crucial issue of the TSN-DEA is that the overall efficiency score depends on the DMUs under evaluation.Thus,the rankings for the DMUs generated by the TSN-DEA model are inconsistent.As a result,the TSN-DEA-based ranking methods are limited.The TSN-DEA’s inconsistency frequently makes it difficult for decision-makers to select the top-rated DMUs.We develop the transformed TSN(T-TSN)DEA method by applying the multi-criteria DEA model to overcome this issue.The proposed method transforms the DMUs with any number of inputs,intermediate measures,and outputs in the TSN process,through the multi-objective programming model with a minimax objective approach,into the DMUs with two inputs and one output in the single-stage network(SSN)process.Then,the well-known DEA methods for the SSN,such as the cross-efficiency and super-efficiency DEA methods,can be applied to evaluate and rank the transformed DMUs more consistently.We exhibit the applicability of the proposed approach for the BBLN design problem.A case study of South Carolina in the USA demonstrates that the proposed method performs well in identifying efficient BBLN schemes more consistently than the traditional TSN-DEA.