scholarly journals The Assessment of Car Making Plants with an Integrated Stochastic Frontier Analysis Model

Mathematics ◽  
2021 ◽  
Vol 9 (11) ◽  
pp. 1296
Author(s):  
Seog-Chan Oh ◽  
Jaemin Shin
Keyword(s):  
Automotive Industry ◽  
Manufacturing Systems ◽  
Stochastic Frontier Analysis ◽  
Stochastic Frontier ◽  
Solution Process ◽  
Plant Productivity ◽  
Industrial Sector ◽  
Analysis Model ◽  
Productivity Improvement ◽  
Frontier Analysis

As global competition has intensified in the automotive industry, there is a strong need for management teams to develop methods that allow accurate and objective assessments of plant productivity and to identify productivity improvement opportunities for the best manufacturing practices. Stochastic frontier analysis (SFA) models have been used as a statistical benchmarking tool to provide a bird’s-eye view of an industrial sector. SFA models can also be adapted for plant productivity assessment. However, owing to the problem of multicollinearity, the general form of SFA is difficult to apply to the assessment of complex manufacturing systems in the automotive industry, which is characterized by many control and external factors that are intercorrelated to each other. This study proposes a method for applying SFA to vehicle manufacturing plants with a focus on gaining high accuracy in model parameter estimation, by decomposing a plant into components (i.e., shops), building an SFA model for each shop, and reintegrating the general plant system through the appropriate combination of shop-level inefficiency distributions. In particular, this study focuses on documenting the derivation of a new probability density function that integrates three different inefficiency distributions. For illustration of the proposed approach, hypothetical vehicle assembly plants are assessed as examples, where the total labor hours are split into Bodyshop, Paintshop, and General Assembly, exclusively and collectively. Finally, this study offers a solution process to clarify the reasons for underperforming plants in terms of labor productivity and identify the course of actions to cure the issues with some managerial insights emphasizing the balanced approach, incorporating people, process and technology.

scholarly journals Advancing the multifactor model of Stochastic Frontier Analysis

2021 ◽  
Vol 3 (4 (111)) ◽  
pp. 58-64
Author(s):  
Arthur Mitsel ◽  
Aliya Alimkhanova ◽  
Marina Grigorieva
Keyword(s):  
Production Function ◽  
Financial Stability ◽  
Stochastic Frontier Analysis ◽  
Stochastic Frontier ◽  
Industrial Sector ◽  
Economic Science ◽  
Financial Indicators ◽  
Analysis Model ◽  
Multifactor Model ◽  
Frontier Analysis

The concept of efficiency is important in economic science; at present, its role in every sector of the economy is growing. Evaluating an enterprise’s efficiency makes it possible to implement a correct and profitable strategy of resource allocation, which shows its potential level Given an annual increase in the number of bankrupt enterprises, the issue of estimating the efficiency of enterprises is relevant for both their owners and managers, as well as for creditors. There are various methods and models for estimating the performance of enterprises. This work has assessed the efficiency of enterprises in the industrial sector over the period of 2017‒2018. Stochastic Frontier Analysis is based on the stochastic model of production function. The classic SFA method is based on the production function of the company, which relates the volume of output to the volume of resources consumed. At the same time, the SFA model uses several inputs (volumes of resources consumed) and only one output parameter ‒ the volume of production. In order to achieve more precise results, a given model has been modified. The model allows several key financial indicators to be taken into consideration as outputs at the same time, based on which the financial activities of the studied economic entities are assessed. The result of the work involving open sources has revealed how the efficiency of different enterprises in the same industry changes over several years. It is shown that the modified Stochastic Frontier Analysis model could be used to assess financial stability and predict bankruptcy.

scholarly journals Market Structure, International Competitiveness, and Price Formation of Hainan’s Fruit Exports

2021 ◽  
Vol 2021 ◽  
pp. 1-13
Author(s):  
Hailing Fu ◽  
Chongli Huang ◽  
Zhuoqi Teng ◽  
Yuantao Fang
Keyword(s):  
Bargaining Power ◽  
Stochastic Frontier Analysis ◽  
Stochastic Frontier ◽  
International Competitiveness ◽  
Production Costs ◽  
Analysis Model ◽  
Frontier Analysis ◽  
Index Model ◽  
Gradual Loss ◽  
Constant Market Share

Through a constant market share (CMS) model and a price index model, current research aims to analyze the impetus of the growth of Hainan, China’s fruit exports and the adverse impact of rising production costs. This paper considered the changes in the international competitiveness of Hainan’s fruit exports and analyzed the reasons for these changes. Additionally, this manuscript analyzed the effects of Hainan’s price-bargaining power on fruit exports under the condition of asymmetric information by applying a two-tier stochastic frontier analysis model. The results show that the rising costs of labor led to the gradual loss of price advantage, and the contribution of competitiveness to the growth of Hainan’s fruit exports has rapidly declined. The results also indicate that the degree of information held by both importers and Hainan has an important influence on the final exporting price, whereas the importers hold more information and have stronger price-bargaining power than Hainan. Policy suggestions based on the results are proposed.

scholarly journals Examining the technical efficiency of small industries: A case study of the crackers industry in South Sumatera, Indonesia

2020 ◽  
Vol 18 (1) ◽  
pp. 13-20
Author(s):  
Mukhlis Mukhlis
Keyword(s):  
Technical Efficiency ◽  
Stochastic Frontier Analysis ◽  
Raw Materials ◽  
Stochastic Frontier ◽  
Secondary Data ◽  
Industrial Sector ◽  
Business Climate ◽  
Frontier Analysis ◽  
Small Industry ◽  
Small Industries

Small industries are life-sustaining for communities because of their political and strategic position in terms of creating job opportunities and increasing revenue. One small industrial sector that has the potential to be developed is the food industry. Small food industries are widely scattered in every area, including in the city of Palembang. A small industrial group of food that became one of the culinary icons in Palembang is the cracker industry. This type of industry is a culinary icon that has been famous for foreign countries. Nevertheless, the cracker industry is still experiencing obstacles in terms of capital and marketing. The cost of raw materials is relatively expensive to technically trigger the industry inefficiencies. Therefore, it is necessary to review the technical efficiency of this small industry.  The variables used in this study were capital, labor, and output. The data used is secondary data that is analyzed by using the Stochastic Frontier Analysis (SFA) approach. The results showed that the technical efficiency achievement of small industrial crackers in South Sumatera is still categorized as low. The use of labor input is more effective than capital use as a result of the utilization of technology and local resources. Therefore, the development of small industrial crackers through an efficiency approach cannot be separated from the application of technology, human resource management, marketing, and business climate.

scholarly journals Total Factor Energy Efficiency of China’s Industrial Sector: A Stochastic Frontier Analysis

2017 ◽  
Author(s):  
Xiaobo Shen ◽  
Boqiang Lin
Keyword(s):  
Energy Efficiency ◽  
Technical Efficiency ◽  
Technical Change ◽  
Stochastic Frontier Analysis ◽  
Stochastic Frontier ◽  
Industrial Sector ◽  
Scale Efficiency ◽  
Efficiency Change ◽  
Output Data ◽  
Frontier Analysis

Based on stochastic frontier analysis and translog input distance function, this paper examines the total factor energy efficiency of China’s industry using input-output data of 30 sub-industries from 2002 to 2014, and decomposes the changes in estimated total factor energy efficiency into the effects of technical change, technical efficiency change, scale efficiency change and input-mix effect. The results show that during this period the total factor energy efficiency in China’s industry grows annually at a rate of 3.63%, technical change, technical efficiency change and input-mix effect contribute positively to the change in total factor energy efficiency, while scale efficiency change contributes negatively to it.

scholarly journals How the role of ATM technology encourage financial efficiency on Madura villagers?

2021 ◽  
Vol 9 (1) ◽  
pp. 43-50
Author(s):  
Alifah Rokhmah Idialis ◽  
Sariyani Sariyani ◽  
Ayu Delawati Prasetyoningtyas ◽  
Roechainy Kartika Ulfa
Keyword(s):  
Rural Communities ◽  
Rural Areas ◽  
Stochastic Frontier Analysis ◽  
Stochastic Frontier ◽  
Analysis Model ◽  
Economic Activities ◽  
Financial Efficiency ◽  
Frontier Analysis ◽  
Automatic Teller Machine ◽  
Financial Technology

Nowadays, the necessity and utilization of Automatic Teller Machine (ATM) technologies increase in rural areas.  Financial technology became a crucial thing and created efficiency in their activities. Some previous research uncovers technology that could create efficiency in the economy, including financial technology. This paper, interest in investigating and detect how ATM technology establishes financial efficiency on villagers. This research was conducted in rural communities on the island of Madura, Indonesia. This study uses SFA (Stochastic Frontier Analysis) model to estimate technical efficiency. This research found out that ATMs in rural communities on Madura Island produce highly financial efficiency. It proved that the villagers in Madura need ATM technology for carrying out their economic activities.  

scholarly journals The Influence of Energy Price Distortion on Region Energy Efficiency in China’s Energy-Intensive Industries from the Perspectives of Urban Heterogeneity

2021 ◽  
Vol 14 (1) ◽  
pp. 88
Author(s):  
Xiaolei Wang ◽  
Hui Wang ◽  
Shuang Liang ◽  
Shichun Xu
Keyword(s):  
Energy Efficiency ◽  
Stochastic Frontier Analysis ◽  
Stochastic Frontier ◽  
Energy Price ◽  
Analysis Model ◽  
Frontier Analysis ◽  
Price Distortion ◽  
Industrial Sectors ◽  
The Impact ◽  
Energy Intensive Industries

As typical representatives of China’s industrial sectors, energy intensive industries are the focus of energy conservation. This study constructs a trans-log production function and stochastic frontier analysis model to analyze the impact of energy price distortion on total factor energy efficiency in energy intensive industries on the city level. The results reveal that the phenomenon of energy price distortion existed in all cities from 2003 to 2019, with an average degree of −0.175; and the total factor energy efficiency in China’s energy intensive sectors showed an upward trend, with an average efficiency of 0.729. Further deep analysis of affecting mechanisms concluded that the price distortion showed a significant restraining effect on improving energy efficiency, while the improvement of urban agglomeration systems had an opposite effect. In addition, energy consumption structure, foreign trade, and infrastructure construction are positively correlated with energy efficiency. Therefore, promoting the market-oriented reform of China’s energy market is of great significance to improve city energy efficiency and build a resource-conserving society.

scholarly journals Technical Efficiency Analysis of Wheat Crop in Arid Region of Punjab, Pakistan

2021 ◽  
pp. 1-9
Author(s):  
Muhammad Fahad Irfan ◽  
Muhammad Umer Afzal ◽  
Kaif Matloob ◽  
Irfan Ahmad Baig
Keyword(s):  
Technical Efficiency ◽  
Stochastic Frontier Analysis ◽  
Stochastic Frontier ◽  
Sampling Technique ◽  
Efficiency Analysis ◽  
Primary Data ◽  
Wheat Crop ◽  
Analysis Model ◽  
Frontier Analysis ◽  
The Mean

The present study aims to estimate the possible effects of credit on production of wheat crop in Chakwal. The research was based on primary data gathered from 120 farmers, selected by using random sampling technique belonging to two tehsils i.e. Talagang and Chakwal. SFA (Stochastic Frontier Analysis) model was adapted to analyze the data and the results show the mean technical efficiency of the wheat crop was 82 percent for borrowers and 76 percent for non-borrowers. The results proposed that the technical efficiency of wheat growers can be increased by increasing loan disbursement in the area.

scholarly journals Assessing the efficiency of maintenance operators: A case study of turning railway wheelsets on an under-floor wheel lathe

2017 ◽  
Vol 231 (2) ◽  
pp. 155-163 ◽  
Author(s):  
Antonio Ramos Andrade ◽  
Julian Stow
Keyword(s):  
Mixed Model ◽  
Stochastic Frontier Analysis ◽  
Linear Mixed Model ◽  
Stochastic Frontier ◽  
Contact Fatigue ◽  
Rolling Contact ◽  
Numerical Control ◽  
Analysis Model ◽  
Frontier Analysis ◽  
Flange Thickness

This article assesses the technical efficiency of different operators turning railway wheelsets on an under-floor wheel lathe. This type of lathe is a computer numerical control machine used to turn wheelsets in situ on the train. As railway wheels are turned, a certain amount of the wheel diameter is lost to restore the tread profile and full flange thickness of the wheel. The technical efficiencies of the different wheel lathe operators are assessed using a stochastic frontier analysis, while controlling for other explaining variables such as the flange thickness and the occurrence of rolling contact fatigue defects, wheel flats and cavities. Different model specifications for the stochastic frontier analysis are compared with linear mixed model specifications, showing that the stochastic frontier analysis model exhibits a better Akaike information criterion.

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