Using data envelopment analysis to analyze the performance of North American class I freight railroads
Financial Modeling Applications and Data Envelopment Applications
ISBN: 978-1-84855-878-6, eISBN: 978-1-84855-879-3
Publication date: 13 October 2009
Abstract
With increased crude oil prices, railroad is emerging as a cheaper alternative to trucks and other less fuel efficient modes of transportation. As a result, with increase in crude oil price, while other modes of transportation have suffered economic slump, railroad industry is thriving with every company reporting an increase in revenue and profits. In this study, we analyze the performance of seven North American Class I freight railroads. In this chapter, we illustrate the use of data envelopment analysis (DEA), an operations research technique, to analyze the financial performance of the U.S. railroad industry by benchmarking a set of financial ratios of a firm against its peers. DEA clearly brings out the firms that are operating more efficiently in comparison with other firms in the industry and points out the areas in which poorly performing firms need to improve.
Citation
Malhotra, R., Malhotra, D.K. and Lermack, H. (2009), "Using data envelopment analysis to analyze the performance of North American class I freight railroads", Lawrence, K.D. and Kleinman, G. (Ed.) Financial Modeling Applications and Data Envelopment Applications (Applications of Management Science, Vol. 13), Emerald Group Publishing Limited, Leeds, pp. 113-131. https://doi.org/10.1108/S0276-8976(2009)0000013009
Publisher
:Emerald Group Publishing Limited
Copyright © 2009, Emerald Group Publishing Limited