Improving Organizational Efficiency by Combining Tier Analysis and Neural Clustering Method

In this article, I propose a hybrid data envelopment analysis (DEA) system that utilizes a methodology combining the tier analysis with the neural clustering method. I aim to show that the hybrid system can be used to evaluate the inter-organizational efficiency in the life insurance companies. The application is unfolded in two phases. In the first phase, DEA is repetitively used to evaluate the efficiency of DMUs and cluster them together according to their efficiency levels (tier analysis). In the second phase, the system utilizes a self organizing map to group similar DMUs, selects benchmarking targets within a reference set, and provides the guidelines on the stepwise enhancements for the inefficient ones. Key-words: Hybrid system, Data mining, Neural clustering, Tier analysis, Data envelopment analysis.