Bi-level programing merger evaluation and application to banking operations

• Autores: Desheng Dash Wu, Cuicui Luo, Haofei Wang, John R. Birge
• Localización: Production and Operations Management, ISSN-e 1937-5956, Vol. 25, Nº. 3, 2016, págs. 498-515
• Idioma: inglés
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• Resumen

  • The potential for operational efficiency improvement is a key consideration for firms contemplating the consolidation of both internal and external business units. This paper develops a leader–follower game model to assess such potential gains from the merger of different organizations with constrained resources. A profit-sharing strategy and algorithm are proposed to solve the model while maintaining incentive compatibility within each unit's decision-making process. This paper further demonstrates that in a framework, within the data envelopment analysis paradigm, a supply chain with an upstream leader and downstream followers is efficient if and only if both the leader and the followers are individually efficient. A case study of a banking operations merger shows how incentive compatible merger of operations can produce overall efficiency improvement.