In this paper method and practice of cross-efficiency calculation is discussed. The main methods proposed in the literature are tested not on a set of artificial data but on a realistic sample of input-output data of European ware- houses. The empirical results show the limited role which increasing automation investment and larger warehouse size have in increasing productive performance. The reason is the existence of decreasing returns to scale in the industry, resulting in sub-optimal scales and inefficiencies, regardless of the operational performance of the facilities. From the methodological perspective, and based on a multidimensional metric which considers the capability of the various methods to rank warehouses, their ease of implementation, and their robustness to sensitivity analyses, we conclude to the superiority of the classic Sexton et al. (1986) method over recently proposed, more sophisticated methods.

Additional Metadata
Keywords Cross-efficiency methods, warehouse efficiency, automation investment
JEL Index Numbers and Aggregation (jel C43), Optimization Techniques; Programming Models; Dynamic Analysis (jel C61), Firm Behavior: Empirical Analysis (jel D22), Production; Capital and Total Factor Productivity; Capacity (jel D24), Retail and Wholesale Trade; Warehousing; e-Commerce (jel L81), Postal and Delivery Services (jel L87)
Persistent URL hdl.handle.net/1765/103185
Series ERIM Report Series Research in Management
Journal ERIM report series research in management Erasmus Research Institute of Management
Citation
Balk, B.M, de Koster, M.B.M, Kaps, C, & Zofío, J.L. (2017). An Evaluation of Cross-Efficiency Methods, Applied to Measuring Warehouse Performance (No. ERS-2017-015-LIS). ERIM report series research in management Erasmus Research Institute of Management. Retrieved from http://hdl.handle.net/1765/103185