BEST PRACTICE ANALYSIS OF BANK BRANCHES - AN APPLICATION OF DEA IN A LARGE CANADIAN BANK

This paper presents a best practice analysis of the Ontario based bran ches of a large Canadian bank. Consistent with managerial goals, the a nalysis focuses on the performance of branch personnel; it considers a s outputs both transactions and maintenance work. To sharpen our effic iency estimates, we use DEA AR models with output multiplier constrain ts based on standard transaction and maintenance times. A model that a dds similar constraints on the input multipliers, based on personnel s alary, is used to find the cost efficient branches, and estimate ''all ocative'' efficiency. Special emphasis is placed on quantifying and di scussing the impact of model choice on the results. Post-hoc statistic al tests are performed to investigate the impact of several external f actors on personnel efficiency as well as the effects of efficiency on quality and profitability. (C) 1997 Elsevier Science B.V.