Efficiency Measurement of Indian Sugar Manufacturing Firms: A DEA Approach

Abstract

Data Envelopment analysis (DEA) has been used to calculate the technical and scale efficiency measures of the public and private sugar manufacturing firms of the Indian Sugar Industry (2006 to 2010). Within DEA framework, the input & Output oriented Variable Returns to Scale (VRS) & Constant Return to Scale (CRS) model is employed for the study of Decision making units (DMUs). A representative sample of 43 firms which account for a major portion of the total market share is studied. The selection criterion for the inclusion of a firm in the analysis was the total sales of INR 5,000 million or more in the year 2010. After reviewing the literature, it is found that no study has been conducted in the context of Indian sugar manufacturing firms in the Post-liberalization era which motivates us to initiate the study.