Evaluating Efficiency of Korean Mass Discount Stores : A Case Study

국내 대형할인점의 효율성 분석에 관한 사례연구

A well-designed location strategy is an integral and important part of corporate strategy for retail firms. The last five years witnessed major changes in retailing industry. A growing city population, rising income levels. and the emergence of suburb areas presented ratailers with new challenges. Mass discount merchandisers and supermarkets expanded rapidly, spreading from Seoul into smaller cities. The rapid increase of mass discount stores raised new concerns and gave rise to the need from a systematic approach to location analysis. In this paper, we present the mathematical background and characteristics of DEA(Data Envelopment Analysis) model, and give a short case study where we apply the DEA model to compute the relative efficiency of 11 Korean mass discount merchandisers. Interpretation of the result is also provided.