Data Envelopment Analysis Case Study

See attached document and answer the corresponding questions.  This case study involves linear programming mathematics.  The answers don’t have to be 100% accurate because this is a tough assignment.  At this point I just need something to turn in.

Mid-Atlantic Bus Lines

Mid-Atlantic Bus Lines was founded by a group of managers from Trailways when that company was acquired by Greyhound. They launched a first-class, express bus service operating between the major coastal cities from Philadelphia, Pennsylvania, to Jacksonville, Florida. By hiring laid-off Trailways drivers and leasing buses, they established franchises in each city with local entrepreneurs, who were given the right to operate a Mid-Atlantic bus terminal. A percentage of the passenger ticket sales and freight sales would be kept by the terminal operator to cover his or her costs and profit.

After several months of operation, some franchisees complained about inadequate profits and threatened to close their terminals. Because other franchisees were pleased with their experiences, however, a study of all terminal operations in the system was undertaken.

The information in Table 8.10 was collected over several weeks and represents a typical day’s operation.

Table 8.10: Outputs and Inputs for Mid-Atlantic Bus Lines

Bus City Ticket Freight Labor Facility

Depot Served Sales Sales Hours Dollars

1 Philadelphia, PA 700 300 40 500

2 Baltimore, MD 300 600 50 500

3 Washington, D.C. 200 700 50 400

4 Richmond, VA 400 600 50 500

5 Raleigh, NC 500 400 40 400

6 Charleston, SC 500 500 50 500

7 Savannah, GA 800 500 40 600

8 Jacksonville, FL 300 200 30 400

The information in Table 8.10 was collected over several weeks and represents a typical day’s operation.

Questions:

1. Use DEA to identify efficient and inefficient terminal operations. Formulate the problem as linear programming model and solve using computer software such as Excel Solver that permits input file editing between runs.

2. What recommendations would you have for the one seriously inefficient terminal in regard to increasing its outputs?

3. What recommendations would you have for the one seriously inefficient terminal in regard to increasing its outputs?

4. Discuss any shortcomings in the application of DEA to Mid-Atlantic Bus Lines.