Mid$-$AtlanticBusLineswas foundedbyagroupofman

agers fromTrailwayswhen that companywas acquired

byGreyhound. They launchedafirst$-$class, expressbus

serviceoperatingbetween themajor coastal cities from

Philadelphia,Pennsylvania, toJacksonville,Florida.Byhir

inglaid$-$offTrailwaysdriversandleasingbuses,theyestab

lishedfranchisesineachcitywithlocalentrepreneurs,who

weregiventherighttooperateaMid$-$Atlanticbusterminal.

Apercentageof thepassenger ticket salesand freight

saleswouldbekeptbytheterminaloperator tocoverhis

or her costs and profit.

Afterseveralmonthsofoperation,somefranchiseescom

plainedabout inadequateprofitsandthreatenedtoclose

FIGURE $7\mathrm{.}21$ DEA Strategic Matrix

$7\mathrm{.}1.$ For the Burger Palace example, perform a complete analysis of efficiency improvement alternatives for unitS$2,$ including

determination of a composite reference unit.

$7\mathrm{.}2.$ For the Burger Palace example, perform a complete analysis of efficiency improvement alternatives for unitS$5,$ including

determination of a composite reference unit.

$7\mathrm{.}3.$ For the Burger Palace example, what is the effect of removing an inefficient unit from the analysis $($e$.$g$.,$S$2)?$

$7\mathrm{.}4.$ For the Burger Palace example, what is the effect of removing an efficient unit from the analysis $($e$.$g$.,$S$6)?$

Chapter $7$: Process Improvement $209$

Chapter $7$: Process Improvement

$210$

their terminals. Because other franchisees were pleased

with their experiences, however, a study of all terminal

operations in the system was undertaken. The information

in Table $7\mathrm{.}9$ was collected over several weeks and repre

sents a typical day$$s operation.

Questions

$1.$

Use DEA to identify efficient and inefficient terminal

operations. Formulate the problem as a linear

programming model, and solve using computer

TABLE $7\mathrm{.}9$

Bus Depot

$1$

$2$

$3$

$4$

$5$

$6$

$7$

$8$

Outputs and Inputs for Mid$-$Atlantic Bus Lines

City Served

Philadelphia, PA

Baltimore, MD

Washington, DC

Richmond, VA

Raleigh, NC

Charleston, SC

Ticket Sales

$700$

$300$

$200$

$400$

software such as Excel Solver that permits input file

editing between runs.

$2.$ Using the appropriate reference set of efficient

terminals, make recommendations for changes in

resource inputs for each inefficient terminal.

$3.$ What recommendations would you have for the one

seriously inefficient terminal in regard to increasing its

outputs?

$4.$ Discuss any shortcomings in the application of DEA to

Mid$-$Atlantic Bus Lines.

Freight Sales

$300$

$600$

$700$

Labor$-$Hours

$40$

Facility Dollars

$500$

$50$

$50$

$600$

$500$

$500$

Savannah, GA

Jacksonville, FL

Selected Bibliography

$800$

$300$

$400$

$500$

$500$

$200$

$50$

$40$

$50$

$40$

$30$

$500$

$400$

$500$

$400$

$500$

$600$

$400$