William F. Bowlin

Measuring Performance: An Introduction to Data Envelopment Analysis (DEA)

Abstract Data Envelopment Analyses (DEA) is a methodology that has been used to evaluate the efficiency of entities (e.g., programs, organizations etc.) which are responsible for utilizing resources to obtain outputs of interest. It has been used to evaluate activities as varied as public schools, hospital surgical units, and real-property maintenance for the U.S. Air Force. DEA is a fractional programming model that can include multiple outputs and inputs without recourse to a priori weights (as in index number approaches) and without requiring explicit specification of functional relations between inputs and outputs (as in regression approaches). It computes a scalar measure of efficiency and determines efficient levels of inputs and outputs for the organizations under evaluation.

A DEA study of gender equity in executive compensation

This study assesses whether annual and long-term compensation for senior executive women is equal to annual and long-term compensation for senior executive men. The group of executive women includes those women reported in the compensation tables of proxy statements for the companies in the Standard and Poors (S&P) 500 for 1997. Their compensation was compared to the compensation for two samples of executive men from S&P 500 firms using data envelopment analysis. The results indicate that the compensation paid to executive women is equitable to the compensation paid to executive men.

Efficiency-Based Budgeting

Abstract The views expressed herein are those of the authors and do not necessarily reflect the views of the Air University, the United States Air Force, or the Department of Defense

A note on the financial condition of defense contractors

In recent years, there have been several changes in the weapon‐system acquisition market which have the potential to negatively impact the financial condition of defense contractors. This study evaluates the financial health of defense firms vis‐a‐vis nondefense firms using a fiscal distress identification model developed by E.I. Altman. We conclude that the financial condition of defense firms has deteriorated but the deterioration is the same as experienced by nondefense firms.

Executive Compensation in the U.S. Defense Industry

Abstract In recent years, there has been a significant amount of public attention directed to the level of executive compensation relative to corporate performance. Generally, the media reports have been negative, i.e., the executives are overpaid for the performance of their company. This concern over the level of executive compensation has carried over to the U.S. defense industry. The purpose of this research is to use data envelopment analysis (DEA) and ratio analysis to compare the level of compensation for chief executive officers (CEOs) in the defense industry with executives from a sampling of S&P 500 firms for the years 1985–92. The results show that during the latter years covered by the study defense CEOs were paid relatively more than non-defense CEOs.

Cost Modeling for Start-up Businesses: A Field Study of Heartland Resource Technologies, LLC

Abstract This paper describes a cost modeling process used for a new business in order to communicate to potential lenders and investors the costs of the business.

Benchmarking the Efficiency of Government Warehouse Operations: A Data Envelopment Analysis Approach

Abstract The purpose of this research is to benchmark the performance of 18 Defense Logistics Agency (DLA) supply warehouses located within the contiguous United States. DLA anticipates a reduced future workload for each of the warehouses, which translates into excess capacity and increased system inefficiency. This study used a mathematical programming tool, data envelopment analysis (DEA), to measure the relative overall efficiency of each warehouse and to determine the sources of inefficiency if they exist. With this methodology, DLA can judiciously target facilities for reduced funding or closure, which will result in the savings of millions of tax dollars.

A Case Study of the Changing U.S. Defense Industry

Abstract This paper reviews how the defense industrial base has responded financially to the changing defense environment. This is done by analyzing financial information and ratios for a sample of defense and non-defense business segments from firms that do business with the Department of Defense (DoD). The volume of defense business has declined since 1988 as indicated by reductions in defense sales, company assets identified to be used for defense contracts, and capital expenditures for defense business segments. However, the profitability and cash flow of defense business segments has improved since 1988 even though the volume of defense business has declined.

Do the Department of Defenses Civil Reserve Air Fleet Participants Need Government Assistance

Abstract The Department of Defense (DoD) relies on the Civil Reserve Air Fleet (CRAF) to augment the Air Forces air mobility and transport capabilities during times of national emergency. Companies that participate in this program are required to provide aircraft and crews when called upon by the Secretary of the Air Force. Companies in a strong financial condition are needed to participate in this program in order to ensure the availability of aircraft and crews when needed. This research assesses the financial condition of CRAF participants. The results of this research indicate that the financial condition of CRAF participants is poor and deteriorating. If the DoD plans to continue to rely on the CRAF to supplement its military airlift capabilities, it may need to provide additional support, monetary and nonmonetary, to these companies.