Abstract

This case study applies data envelopment analysis (DEA), a well-known performance measurement methodology, to assess and compare individual store’s efficiency of Saint Honore Cake Shop. Students will learn the major concepts of benchmarking store-level performance and how to proceed with DEA to identify the most efficient retail stores (benchmarks) and less efficient ones. For the less efficient stores, students will also have the opportunity to perform sensitivity analysis to explore different ways to improve their performance.

Learning Objectives

After analyzing the case, students will be able to:

1.       Discuss the limitations of prevailing performance evaluation approaches 

2.       Explain how DEA can be an effective tool to determine store-level performance involving multiple input and output variables

3.       Conduct DEA and interpret the results with a trial version of the Frontier Analyst software

4.       Discuss how the efficiency results can be combined with profitability for providing a more comprehensive view of store-level performance