Key Determinants of Performance Assessment for U.S. TPL: DEA and Cluster Analysis

Abstract

Based on empirical data of twenty third-party logistic providers in America, this study adopts DEA and cluster analysis to evaluate the key factors in performance assessment. It was found that returns of scale of DMUs' status influenced efficiency ranking. The A&P model is shown useful in distinguishing efficient DMUs, while for inefficient DMUs the cross efficiency model is excellent. Empirical analysis in classification shows consistent results for factors directly correlated with logistics in both DEA and cluster analysis. While past research emphasized the importance of financial performance, this paper argues that it should take another perspective in performance assessment. This study indicates that important factors generally used in financial studies do not exhibit significant influence as expected, demonstrating a critical approach is to achieve operations efficiency rather than financial efficiency. Finally, this paper makes some recommendations to improve the operations' efficiency for logistics firms