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Strategic Performance Improvement – Lesson Summary

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PERFORMANCE
Performance is expressed as the ratio of an aggregate output to a single input or an aggregate input used in a production process. In other words, output per unit of input, typically over a specific period of time.
Input and Output Measures of a Warehouse

The Output of a warehouse is how much load it is loading and how much it is unloading.
The workers capital, variable costs, and equipments are the Inputs of a warehouse

DATA ENVELOPMENT ANALYSIS (DEA)
Data Envelopment and Analysis indicate if a firm is completely efficient or has the capacity to improve. It calculates by how much input must be decreased or output must be increased in order to become efficient.
Input and Output Oriented Model
A model is input oriented if the inputs are controlled by the management. For example, labour or number of employees in a private organization.
A model is output oriented if the inputs are not controllable but outputs are controlled by the management. For example, labour or number of employees given in a bank and that number cannot be changed.
CONSTANT RETURNS TO SCALE (CRS) 
A constant returns to scale is when an increase in the input results in a proportional increase in output. Increasing returns to scale is when the output increases in a greater proportion than the increase in input.
VARIABLE RETURNS TO SCALE (VRS)
Variable returns to scale (VRS) is a type of frontier scale used in data envelopment analysis (DEA). It helps to estimate efficiencies whether an increase or decrease in input or outputs does not result in a proportional change in the outputs or inputs respectively.