Using data envelopment analysis for outsourcing decision: A case of Taiwan PCB manufacturer

Dong Shang Chang, Yi Chun Kuo, Po Wen Kuo, Tz Yu Chen

Research output: Contribution to conferencePaperpeer-review

Abstract

A successful printed circuit board (PCB) industry provides abundant downstream market capacity while the vertical disintegration system protects its upstream production edge. Determine which manufacturing process should be outsourced is a critical management decision to PCB manufactures. In practice, the outsourcing decision is mainly determined by the capacity utilization rate and focus on individual process. In this article, multicriteria are considered to assist the managers to assess the priority of outsourcing among the manufacturing process. This article employs the Data Envelopment Analysis (DEA) method to evaluate the performance of manufacturing processes and utilizes Malmquist Productivity Index (MPI) to measure the productivity change in these processes. The proposed approach is applied to a PCB manufacturer which is leadership in Taiwan PCB industry. This article firstly applies manufacturing processes as Decision Making Units (DMUs) in DEA model finding inefficient processes to be outsourced. The empirical application and analysis result in important insight into the managerial theory and references for outsourcing practitioners.

Original languageEnglish
Pages3438-3449
Number of pages12
StatePublished - 2006
Event36th International Conference on Computers and Industrial Engineering, ICC and IE 2006 - Taipei, Taiwan
Duration: 20 Jun 200623 Jun 2006

Conference

Conference36th International Conference on Computers and Industrial Engineering, ICC and IE 2006
Country/TerritoryTaiwan
CityTaipei
Period20/06/0623/06/06

Keywords

  • Data envelopment analysis
  • Efficiency
  • Outsourcing
  • Productivity

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