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Application of Multi-Criteria Analysis in the Public Procurement Process Optimization

Abstract

One of the key steps in the implementation of a public procurement process is the criteria selection that are associated with the bidders, which are intended to ensure that bidders will be able to meet the requirements from the contract. Implicitly, the criteria selection includes their evaluation in situations when the criterion of the lowest price is not applied, but instead the criterion of the most economically advantageous tender. The aim of the paper is to show that decision-makers in the public sector can use multi-criteria analysis for the efficient and fair public procurement process implementation and the establishment of objective conditions for the contract awarding in accordance with the general social interests. In this sense, the paper presents a comparative approach to the Analytic Hierarchy Process and Analytic Network Process as the methods of support in decision making, measurement and evaluation criteria for the selection of the best bids in the procurement process. Hierarchical model with five criteria and nine sub-criteria and the network model, which takes into account the mutual influences of criteria, were developed in a hypothetical public procurement selection procedure for the best performers for the construction of the infrastructure facility. Selection of the best bidder, i.e. bids for the realization of the work, is distinctive, multi-criteria problem which includes both qualitative and quantitative factors.

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European railway reforms and efficiency: Review of evidence in the literature

Abstract

The objective of the European railway reforms which started in the 1990s was to enable the entry of competition to raise the efficiency of railway transport. This was undertaken because the level of services, particularly in former Eastern Bloc countries, was very low due to neglected investment, and so railway transport market share was in decline. The primary goal of this text is to determine based on available empirical studies whether the reforms affected the efficiency of the railway sector positively, and the secondary aim is to identify the factors which complicate evaluation of the reforms’ impact. According to empirical studies, the effect of competition on efficiency is unclear. The reforms have brought the most benefit to consumers, but their overall effect depends on many other factors. Competition for the market appeared to be a better way of implementing competition than competition in the market. In addition, comprehension of the problems complicating the analysis and their inclusion in the evaluation process constitutes an important point in evaluating the reforms’ effects and could be inspiring for countries that have not yet implemented all reforms.

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Modeling the Dynamics of the Production Process in the Conditions of Uncertainty with the Use of the Calculus of Variations

Abstract

The article examines the possibility of applying elements of the calculus of variations to determine the quasi-optimum distribution of production at the time in terms of stochastic. The discussion concerns the problems of modeling the distribution of production in a situation where we are dealing with a single product. Then, it has been generalized to a larger number of simultaneously produced ranges. In summary, it was the topic of the proposed methods possibilities of applications in practice firms.

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Ranking Alternatives by Pairwise Comparisons Matrix and Priority Vector

Abstract

The decision making problem considered here is to rank n alternatives from the best to the worst, using information given by the decision maker(s) in the form of an n×n pairwise comparisons (PC) matrix. We investigate pairwise comparisons matrices with elements from a real interval which is a traditional multiplicative approach used in Analytic hierarchy process (AHP). Here, we deal with two essential elements of AHP: measuring consistency of PC matrix and the method of eliciting the priority vector by which the final ranking of alternatives is derived. Classical approaches introduced by T. Saaty in AHP are compared with later approaches based on the AHP criticism published in the literature. Advantages and disadvantages of both approaches are highlighted and discussed.

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Efficiency Estimation of Commercial Banks Based on Financial Performance: Input Oriented DEA CRS/VRS Models

Abstract

Measurement and evaluation of the bank’s operations efficiency requires analytical techniques that provide data beyond those available from the standard analysis of financial statements. The Data Envelopment Analysis (DEA) is a mathematical programming technique that offers valuable insights in finding inefficient banks taking into account the scope of the services and resources used to provide these banking services. The results of the DEA analysis can provide significant information to the bank’s management that can supplement the information obtained using traditional techniques for assessing efficiency. The assessment of banks’ efficiency in the Republic of Serbia is of particular importance due to intense competition and implemented banking reforms. Therefore, in this paper DEA analysis will be applied for the examination and assessment of the efficiency of the operations of Serbian banks during the period 2014-2016. The analysis will show which of the banks operates efficiently, where the efficiency of the banks is not at a satisfactory level, as well as the potential reasons for inefficiency.

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Streamlining of the Process of Decision-Making in Real Estate Management with Incomplete Information

Abstract

This paper presents a streamlined sub-system of decision-making in a real estate market with incomplete data. As we currently observe, various entities collect data and use databases, which entails a problem with their quality and completeness. This results from the specifics of the real estate market, particularly from the nature of the available information, access to it and integral uncertainty.

In the first part of this paper, we will present substantive guidelines for the development of a procedure for supplementing missing information. Afterwards, in order to verify the feasibility and effectiveness of the procedure, an implementation simulation will be conducted on the selected example. We would like to emphasize that all decisions are made under the conditions of an information gap.

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Effective Portfolios – An Application of Multi-Criteria and Fuzzy Approach

Abstract

Research background: When selecting effective portfolios, the portfolio risk is minimized at the given expected return rate or the expected return rate is maximized with a given risk level. However, it is also worth using additional information, such as fundamental and market indicators to examine the companies’ economic and financial situation. Taking into account the chosen indicators, the initial selection of companies can be approached as a multi-criteria problem. Besides, the choice of the period from which data will be taken gives the opportunity to use non-standard tools.

Purpose: The main aim of the article is to compare the profitability of effective portfolios obtained on the basis of a multi-criteria grouping of companies.

Research methodology: In the study TOPSIS and FTOPSIS methods were used.

Results: The results showed that the fuzzy approach could be an effective tool in obtaining more beneficial effective portfolios. Moreover, in the research, two sets of criteria differing by one indicator were used: in one of the approaches the P/E ratio was used, in the second the P/E ratio was replaced by the value of net profit per share – the analyses showed that the portfolios built on the basis of the groups for which the P/E ratio was used, had recorded better results.

Novelty: The values of criterion evaluations from the considered years were treated as triangular fuzzy numbers – this enabled the use of the FTOPSIS method and a comparison of different approaches.

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A Survey and Analysis of Scholarly Literature in DEA Published by Croatian Researchers: 1978 – 2018

Abstract

After its introduction in 1978, Data Envelopment Analysis (DEA) has instantly been recognized as a useful methodology for measuring the relative efficiency of different entities, called Decision Making Units (DMUs), given multiple criteria. Up until nowadays, the popularity of DEA has been growing and a significant number of bibliographical items was published, reporting on both theoretical and empirical results. However, the main applicative area of DEA remained the performance measurement in economics and business. On the 40th anniversary of DEA, the aim of this paper is to present the DEA bibliography of Croatian scientists (up until June 2018). We consider six main categories of DEA-related publications, followed with key statistics and an overview of keywords and research areas. The whole list of DEA-related publications used in this analysis is published online. We believe this research will shed light on the state of DEA in Croatian science and motivate future researches.

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Behavioural Present Value Defined as Fuzzy Number – a New Approach

Abstract

The behavioural present value is defined as a fuzzy number assessed under the impact of chosen behavioural factors. The first formal model turned out to be burdened with some formal defects which are finally corrected in the presented article. In this way a new modified formal model of a behavioural present value is obtained. New model of the behavioural present value is used to explain the phenomenon of market equilibrium on the efficient financial market remaining in the state of financial imbalance. These considerations are illustrated by means of extensive numerical case study.

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Effectiveness of National Airlines in Europe – the DEA Approach

Abstract

National airlines operate in a highly competitive environment. EU airlines face a challenge to compete with low cost carriers, as a result of the liberalization process in the sector. European flag airlines of non-EU member states, not benefiting from liberalization, are forced to compete internationally. This research is focused on national carriers, as they provide the majority of service to and from central and regional airports. Therefore, to establish the most efficient entities on the passenger air transport market, DEA (Data Envelopment Analysis) methodology, has been utilized. The purpose of this paper is to evaluate the effectiveness of 29 chosen national airlines in Europe in the year 2013, using the DEA approach, to pinpoint the subset of fully-efficient market leaders, as well as potential sources of inefficiency, among less effective carriers. The analysis incorporates information on inputs (e.g. fleet, number of employees, number of countries and airports served) and outputs (revenue, annual passengers carried, load factor). The results show that more than 40% (12 of 29) researched airlines are effective and the other 34% are near-efficient. Moreover, outcomes suggest that “going big” may not increase effectiveness. It is harder to achieve full efficiency for big carriers than small ones.

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