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Improvement on the Efficiency of Technology Companies in Malaysia with Data Envelopment Analysis Model

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Advances in Visual Informatics (IVIC 2017)

Part of the book series: Lecture Notes in Computer Science ((LNIP,volume 10645))

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Abstract

Efficiency evaluation is vital as it is able to determine the financial performance of the companies. Efficiency describes how well the companies in utilizing their inputs to generate outputs. The objective of this study is to propose a financial ratio based Data Envelopment Analysis (DEA) model to evaluate and compare the efficiency of listed technology companies in Malaysia for the period of 2011–2015. In DEA model, the efficiency is defined as the ratio of sum-weighted outputs to sum-weighted inputs. In this study, LINGO software is used to solve the DEA model. The results of this study indicate that ELSOFT, GTRONIC, KESM, MPI and VITROX are ranked as efficient technology companies in Malaysia. Besides that, the potential improvement for each inefficient company can be identified based on the benchmark efficient companies. This study is significant because it helps to identify the efficient technology companies which can serve as benchmarks to other inefficient companies for further improvement. Moreover, it is a pioneer study of proposing DEA model with financial ratio to evaluate and compare the efficiency of technology companies in Malaysia.

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Acknowledgements

The authors express gratitude to the research grant project number FRGS/1/2015/SG04/UTAR/02/3 for the support.

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Authors and Affiliations

  1. Department of Physical and Mathematical Science, Faculty of Science, Universiti Tunku Abdul Rahman, Kampar Campus, Jalan Universiti, Bandar Barat, 31900, Kampar, Perak, Malaysia

    Lam Weng Hoe, Lam Weng Siew & Liew Kah Fai

  2. Centre for Mathematical Sciences, Universiti Tunku Abdul Rahman, Kampar Campus, Jalan Universiti, Bandar Barat, 31900, Kampar, Perak, Malaysia

    Lam Weng Hoe, Lam Weng Siew & Liew Kah Fai

  3. Centre for Business and Management, Universiti Tunku Abdul Rahman, Kampar Campus, Jalan Universiti, Bandar Barat, 31900, Kampar, Perak, Malaysia

    Lam Weng Hoe & Lam Weng Siew

Authors
  1. Lam Weng Hoe
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  3. Liew Kah Fai
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Corresponding author

Correspondence to Lam Weng Hoe .

Editor information

Editors and Affiliations

  1. Universiti Kebangsaan Malaysia, Bangi, Selangor, Malaysia

    Halimah Badioze Zaman

  2. University of Cambridge, Cambridge, United Kingdom

    Peter Robinson

  3. Dublin City University, Dublin, Ireland

    Alan F. Smeaton

  4. National Central University, Jhongli, Taiwan

    Timothy K. Shih

  5. Carlos III University of Madrid, Madrid, Spain

    Sergio Velastin

  6. Toyo University, Kawagoe, Japan

    Tada Terutoshi

  7. Universiti Kebangsaan Malaysia, Bangi, Selangor, Malaysia

    Azizah Jaafar

  8. Universiti Kebangsaan Malaysia, Bangi, Selangor, Malaysia

    Nazlena Mohamad Ali

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Hoe, L.W., Siew, L.W., Fai, L.K. (2017). Improvement on the Efficiency of Technology Companies in Malaysia with Data Envelopment Analysis Model. In: Badioze Zaman, H., et al. Advances in Visual Informatics. IVIC 2017. Lecture Notes in Computer Science(), vol 10645. Springer, Cham. https://doi.org/10.1007/978-3-319-70010-6_2

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  • DOI: https://doi.org/10.1007/978-3-319-70010-6_2

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  • Publisher Name: Springer, Cham

  • Print ISBN: 978-3-319-70009-0

  • Online ISBN: 978-3-319-70010-6

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