Nonparametric data envelopment analysis (DEA) models were coded and used to
measure radial and non-radial technical efficiency for a sample of logging contractors.
Firms were evaluated in regards to the efficiency with which they converted inputsdollars
of capital, consumables, and labor - into output - tons of wood. Overall, for the
period between 1988 to 1994, the logging contractors were efficient, but some were
considerably less efficient than their peers. Loggers tended to move from period of high
efficiency to period of lesser efficiency, although some were considerably more stable
than others.
Of those contractors who displayed the most stability in regard to technical efficiency, a
majority could be considered as enjoying a preferred-suppliers status. Of the least stable
loggers, none were identified as operating under a preferred-suppliers agreement. There
was strong evidence that low capacity utilization had a negative impact on technical
efficiency, quarters when capacity utilization was high were more likely to have a high
technical efficiency ratio than quarters with a low capacity utilization. Operating scale also influenced technical efficiency. For the sample, the most productive scale size
(mpss) was estimated to be somewhere between 60,000 to 80,000 tons per year. Up to
that size, increasing return to scales were observed, afterward decreasing returns to scale
settled in. Approximately one quarter of all inefficiencies were scale related.
The relationship between overall technical efficiency and unit and total margin was
explored using scale efficient loggers (pure technical efficiency). For these observations
the mpss corresponded to the point of minimum average cost. Loggers producing at a
size below the mpss could increase total and unit margin by increasing production. Once
past the mpss, loggers could decrease their unit margin but still increased their total
margin up until marginal costs equaled marginal revenue. The rate paid by a
procurement organization influence fhe size at which loggers can produce profitably, and
determine the level of production elasticity available.
next to an author's name indicates that all files or directories associated with their ETD are accessible from the Virginia Tech campus network only.
