COMBINED RANKING OF SELECTED PUBLIC SECTOR ENTERPRISE TRANSPORTATION EQUIPMENT COMPANIES: A SHANNON-DEA APPROACH

Using the Shannon entropy method, the efficiency scores of public sector enterprise transportation equipment companies under cost, revenue and profit models are combined to obtain a comprehensive ranking. Results of degree of diversification and degree of importance associated with each model suggest that profit model has a larger value of discriminatoryability and weight compared to cost and revenue models.

Firms which are close to profit and cost efficient frontiers are ranked better under Shannon index compared to those which are away from the efficient frontiers. In general, firms which are closed to efficient frontier are ranked better compared to those which are away from the efficient frontier under Shannon index. Finally, this paper pointed out that Shannon-DEA approach provides a reasonable way of ranking the companies.