A DATA ENVELOPMENT ANALYSIS APPROACH TO BENCHMARKING THE EFFICIENCY IN SELECTED MALAYSIAN FOOD MANUFACTURING COMPANIES
DOI:
https://doi.org/10.24191/mjoc.v11i2.11441Keywords:
Benchmarking, Data Envelopment Analysis, Efficiency, Decision-making UnitsAbstract
Food industry, which includes every stage of the production process, from farming and manufacturing to distribution, retail and services, is one of the biggest and most significant sectors in the global economy. The relative efficiency of Malaysian food manufacturing companies is still unclear since many of them lack benchmarking tools and struggle to allocate labor, energy and raw materials optimally. This study applies the Data Envelopment Analysis (DEA) method to examine the relative efficiency of Malaysian food manufacturing companies. Relative efficiency refers to the ratio of the weighted sum of the outputs to the weighted sum of the inputs. The main objectives of this research are to measure the relative efficiency of a selection of companies, identify the most efficient companies and provide strategies to improve resource use. DEA is a mathematical approach that compares several inputs and outputs to measure how efficient decision-making units (DMUs) are. Seven companies were chosen for this study and their financial information for 2023, which is represented by DMU1, DMU2, DMU3, DMU4, DMU5, DMU6 and DMU7 have been examined. Capital, fixed assets, operating expenses, current assets and liabilities are the input variables taken into consideration while revenue and net profit are the output variables. Five businesses, DMU2, DMU4, DMU5, DMU6 and DMU7, had a complete relative efficiency score of 100% and DMU1 got a near-perfect efficiency score of 99.98%. Meanwhile, DMU3 has shown lower efficiencies of 71.49%. DMU3 was subjected to an improvement strategy to enhance the performance of the most inefficient units. This company was able to achieve a 100% relative efficiency score after implementing the strategy. The findings of this research offer insightful information about efficiency in Malaysia’s food manufacturing industry as well as an approach for underperforming businesses to improve their utilization of resources and decision-making procedures.
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The datasets used and analysed during the current study are available from the corresponding author on reasonable request.
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Copyright (c) 2026 Zuraida Alwadood, Natasya Syafiah Marlis Elias, Norlenda Mohd Noor, Bekzodjon Fayziev
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