Multi-Stage Stochastic Frontier Analysis for Simple Networks

Johnes, Geraint and Tsionas, Mike and Izzeldin, Marwan (2024) Multi-Stage Stochastic Frontier Analysis for Simple Networks. International Transactions in Operational Research. ISSN 0969-6016 (In Press)

Text (paper)
marwan_paper.pdf - Accepted Version
Available under License Creative Commons Attribution.
Download (585kB)

Abstract

We develop a method for modelling multi-stage production using stochastic frontier analysis. This approach is suitable for the analysis of costs or output where intermediate outputs become inputs into a subsequent stage of the production process, either within an organization or in the form of a supply chain. Our focus is on higher education institutions in England, and the purpose is to assess the performance of our novel methods using MCMC methods. Without taking into full account of the complexity of the ’network’, key decisions cannot be made regarding intake quality, student/staff ratios, per-student spending or academic reputation (the last of which involves costly decisions in terms of academic openings and the profile of candidates desired for any given university).