Stochastic DEA for restructure strategy: an application to a Japanese petroleum company

DEA (Data Envelopment Analysis) is a management science method that has bee n widely applied for performance analysis in various sectors. A shortcoming of previous DEA applications is that it has been used to mainly evaluate e x ante performance. Believing that future planning is more important than p ast evaluation, this study documents how to incorporate future information into DEA. A stochastic DEA model is presented and then it is reformulated i n the manner that the stochastic model can incorporate future information. The proposed approach is referred to as "DEA future analysis" in this study . To document the practicality of DEA future analysis, this research applie s the proposed approach to plan the restructure strategy of a Japanese petr oleum company. (C) 2000 Elsevier Science Ltd. All rights reserved.