Skip to main content
SpringerLink
Log in

Considering Monopoly Maintenance Cost for an Automobile Purchase in China: A DEA-Based Approach

  • Published:
Journal of Systems Science and Complexity Aims and scope Submit manuscript

Abstract

With the fast growing economy, China has become the biggest automobile market in the world. Many Chinese families buy automobiles to promote individual wellbeing and facilitate the convenience of lives. Automobile purchase has become a general and important decision for a Chinese family. However, it is always difficult to make a decision on the automobile purchase that balance the automobiles performance and its cost. Moreover, the automobile maintenance market in China is monopolistic. Thus, the maintenance cost is a significant consideration in automobile purchase decision. This paper employs the concept of data envelopment analysis (DEA) to measure cost performance of the automobile with considering the monopoly maintenance cost. The RCA (ratio of the total price of accessories of an automobile to the price of the automobile) 100 index system is used to represent the maintenance cost of each automobile. The structure of the automobile maintenance market can be reflected with including the RCA 100 index system in the performance evaluation. Results of the case study of 28 automobiles in China verify the necessity of considering the maintenance cost in automobile purchase decision.

This is a preview of subscription content, log in via an institution to check access.

Access this article

Log in via an institution

Price excludes VAT (USA)
Tax calculation will be finalised during checkout.

Instant access to the full article PDF.

Institutional subscriptions

Similar content being viewed by others

References

  1. Liao K, Deng X, and Marsillac E, Factors that influence Chinese automotive suppliers’ mass customization capabilities, International Journal of Production Economics, 2013, 146(1): 25–36.

    Article  Google Scholar 

  2. The Guardian, 2010. January 8, 2010. China overtakes US as world’s biggest car market. (http://www.guardian.co.uk/business/2010/jan/08/china-us-car-sales-overtakes) (Last accessed December 15, 2011).

  3. Byun D H, The AHP approach for selecting an automobile purchase model, Information & Management, 2001, 38(5): 289–297.

    Article  Google Scholar 

  4. Schoner B and Wedley W C, Ambiguous criteria weights in AHP: Consequences and solutions, Decision Sciences, 1989, 20(3): 462–475.

    Article  Google Scholar 

  5. Sueyoshi T, Shang J, and Chiang W C, A decision support framework for internal audit prioritization in a rental car company: A combined use between DEA and AHP, European Journal of Operational Research, 2009, 199(1): 219–231.

    Article  MATH  Google Scholar 

  6. Aghdaie S F A and Yousefi E, The comparative analysis of affecting factors on purchasing domestic and imported cars in Iran market-using AHP technique, International Journal of Marketing Studies, 2011, 3(2): 142–150.

    Google Scholar 

  7. Papagapiou A, Mingers J, and Thanassoulis E, Would you buy a used car with DEA? OR Insight, 1997, 10(1): 13–19.

    Article  Google Scholar 

  8. Papahristodoulou C, A DEA model to evaluate car efficiency, Applied Economics, 1997, 29(11): 1493–1508.

    Article  Google Scholar 

  9. Staat M and Hammerschmidt M, Product performance evaluation: A super-efficiency model, International Journal of Business Performance Management, 2005, 7(3): 304–319.

    Article  Google Scholar 

  10. Saranga H, The Indian auto component industry — Estimation of operational efficiency and its determinants using DEA, European Journal of Operational Research, 2009, 196(2): 707–718.

    Article  MathSciNet  MATH  Google Scholar 

  11. Yousefi A and Hadi-Vencheh A, An integrated group decision making model and its evaluation by DEA for automobile industry, Expert Systems with Applications, 2010, 37(12): 8543–8556.

    Article  Google Scholar 

  12. González E, Cárcaba A, and Ventura J, How car dealers adjust prices to reach the product efficiency frontier in the Spanish automobile market, Omega, 2015, 51: 38–48.

    Article  Google Scholar 

  13. Charnes A, Cooper W W, and Rhodes E, Measuring the efficiency of decision making units, European Journal of Operational Research, 1978, 2(6): 429–444.

    Article  MathSciNet  MATH  Google Scholar 

  14. Dai Q Z, Li Y J, and Liang L, Allocating fixed costs with considering the return to scale: A DEA approach, Journal of Systems Science and Complexity, 2016, 29(5): 1320–1341.

    Article  MathSciNet  MATH  Google Scholar 

  15. Cooper W W, Seiford L M, and Tone K, Data Envelopment Analysis: A Comprehensive Text with Models, Applications, References and DEA-Solver Software, Springer, New York, 2007.

    MATH  Google Scholar 

  16. Cooper W W, Seiford L M, and Zhu J, Data Envelopment Analysis: History, Models, and Interpretations, in Handbook on Data Envelopment Analysis, Springer, Boston, MA, 2011.

    Book  Google Scholar 

  17. Lim S and Zhu J, Incorporating performance measures with target levels in data envelopment analysis, European Journal of Operational Research, 2013, 230(3): 634–642.

    Article  Google Scholar 

  18. Silva T C, Tabak B M, Cajueiro D O, et al., A comparison of DEA and SFA using micro-and macro-level perspectives: Efficiency of Chinese local banks, Physica A: Statistical Mechanics and Its Applications, 2017, 469: 216–223.

    Article  Google Scholar 

  19. Zheng S S, Fu Y L, Lai K K, et al., An improvement to multiple criteria ABC inventory classification using Shannon entropy, Journal of Systems Science and Complexity, 2017, 30(4): 857–865.

    Article  MathSciNet  MATH  Google Scholar 

  20. Wu J, Chu J F, Zhu Q Y, et al., DEA cross-efficiency evaluation based on satisfaction degree: An application to technology selection, International Journal of Production Research, 2016, 54(20): 5990–6007.

    Article  Google Scholar 

  21. Shi Y, Yang Z F, Yan H, et al., Delivery efficiency and supplier performance evaluation in China’s E-retailing industry, Journal of Systems Science and Complexity, 2017, 30(2): 392–410.

    Article  Google Scholar 

  22. Sun J S, Wu J, Liang L, et al., Allocation of emission permits using DEA: Centralised and individual points of view, International Journal of Production Research, 2014, 52(2): 419–435.

    Article  Google Scholar 

  23. Salo A and Punkka A, Ranking intervals and dominance relations for ratio-based efficiency analysis, Management Science, 2011, 57(1): 200–214.

    Article  MATH  Google Scholar 

  24. Podinovski V V, DEA models for the explicit maximization of relative efficiency, European Journal of Operational Research, 2001, 131(3): 572–586.

    Article  MathSciNet  MATH  Google Scholar 

  25. Dyson R G, Allen R, Camanho A S, et al., Pitfalls and protocols in DEA, European Journal of Operational Research, 2001, 132(2): 245–259.

    Article  MATH  Google Scholar 

Download references

Acknowledgement

The authors are grateful to Professor Joe Zhu for his suggestions and comments on earlier versions of the paper.

Author information

Authors and Affiliations

  1. School of Economics, Hefei University of Technology, Hefei, 230009, China

    Qianzhi Dai

  2. Center for Industrial Information and Economic Research, Hefei University of Technology, Hefei, 230009, China

    Qianzhi Dai

  3. Academy of Mathematics and Systems Science, Chinese Academy of Science, Beijing, 100190, China

    Lin Li

  4. School of Management, Hefei University of Technology, Hefei, 230009, China

    Xiyang Lei

  5. School of Business, Central South University, Changsha, 410083, China

    Qingxian An

  6. School of Management, University of Science and Technology of China, Hefei, 230026, China

    Xiao Tang

Authors
  1. Qianzhi Dai
    View author publications

    You can also search for this author in PubMed Google Scholar

  2. Lin Li
    View author publications

    You can also search for this author in PubMed Google Scholar

  3. Xiyang Lei
    View author publications

    You can also search for this author in PubMed Google Scholar

  4. Qingxian An
    View author publications

    You can also search for this author in PubMed Google Scholar

  5. Xiao Tang
    View author publications

    You can also search for this author in PubMed Google Scholar

Corresponding author

Correspondence to Xiyang Lei.

Additional information

This research is supported by the National Natural Science Foundation of China under Grant Nos. 71701060, 71801075 and 71501189, Social Sciences Foundation of Anhui Province under Grant No. AHSKY2017D78, the Fundamental Research Funds for the Central Universities under Grant Nos. JZ2018HGBZ0174, JS2017HGXJ 0028 and JZ2016HGBZ0996, the Natural Science Foundation of Hunan Province under Grant No. 2017JJ3397, and the Open Project of ‘Mobile Health’ Ministry of Education-China Mobile Joint Laboratory of Central South University.

Rights and permissions

Reprints and permissions

About this article

Check for updates. Verify currency and authenticity via CrossMark

Cite this article

Dai, Q., Li, L., Lei, X. et al. Considering Monopoly Maintenance Cost for an Automobile Purchase in China: A DEA-Based Approach. J Syst Sci Complex 32, 1167–1179 (2019). https://doi.org/10.1007/s11424-019-8073-8

Download citation

  • Received:

  • Revised:

  • Published:

  • Issue Date:

  • DOI: https://doi.org/10.1007/s11424-019-8073-8

Keywords

Search

Navigation