Application of Data Envelopment Analysis by the Evaluation of the Quality and Operational Factors

In the last decade, soft drink products among FMCG (Fast Moving Consumer Goods) industry have been facing serious problems due to the change in the consumer preferences. Health concerns towards these products had risen and companies keep making strategies to cope with this change. Since, the condition of the market shares getting narrower, maintaining efficient operations throughout the industry supply chain became an essential matter. The study focuses on the efficiency evaluation of soft drink company’s production lines between 2010 and 2015 located in Köprülüköy Cyprus, since the production phase is one of the most essential part of the whole operation. Data Envelopment Analysis is a widely known technique used for the evaluation of technical efficiencies of decision making units where multiple inputs and multiple outputs were under concern. Here, production lines of the production facility have chosen as DMUs and among the models of DEA, standard CCR and standard BCC models were utilized. Since the study was being performed in FMCG sector, where perishable food products were under concern, quality factors were also taken into consideration besides operational factors in the operation. Especially for the food production process, efficiency of the whole operation is definitely affected by the efficiency of the quality operations. In this study a general procedure for the evaluation of the production line efficiencies for the perishable goods had built that could easily adapted to the whole industry. Findings of the models can help management in decision making process, budget planning purposes, categorize production lines, future plans, and help to build a corporate memory for the efficiency of the lines. Keywords: Data Envelopment Analysis, FMCG, Quality Factors, Operational Factors, Efficiency, CCR Model, BCC Model, Food Production, Soft drink.