Quantitative Models for Performance Evaluation and Benchmarking: Data Envelopment Analysis with Spreadsheets

Marketing has a tradition in conducting scientific research with cutting-edge techniques developed in management science, such as data envelopment analysis (DEA) (Charnes et al. 1985). Two decades ago, Kamakura, Ratchford, and Agrawal (1988) applied DEA to examine market efficiency and consumer welfare loss. In this review of three new books, my purpose is (1) to provide a background of DEA for marketing scholars and executives and (2) to motivate them with exciting DEA advances for marketing theory and practice. All three books provide brief descriptions of DEA’s history, origin, and basic models. For beginners, Ramanathan’s work, An Introduction to Data Envelopment Analysis, is a good source, offering basic concepts of DEA’s efficiency and programming formulations in a straightforward manner (with some illustrations) in the first three chapters. A unique feature of this book is that it dedicates a chapter to discussing as many as 11 DEA computer software programs and explaining some noncommercial DEA packages that are available free on the Internet for academic purposes. As Ramanathan states (p. 111), “[I]n this computer era, it is important that any management science technique has adequate software support so that potential users are encouraged to use it. Software harnesses the computing power of [personal computers] for use in practical decision-making situations. It can also expedite the implementation of a method.” EDITOR: Naveen Donthu