Iranian Bank Branches Performance by Two Stage DEA Model

This paper seeks to measure and evaluate the overall performance of Finance organizations (Iranian Bank) using a Data Envelopment Analysis (DEA) methodology. DEA is a special linear programming model for deriving the comparative efficiency of multiple-input multiple-output Decision-Making Units (DMUs). DEA provides management with information regarding the relatively best practice branch in the observation set and locates the relatively inefficient branches by comparison with the best practice ones. In addition, it indicates the magnitude of these inefficiencies. The paper selects a set of inputs and outputs for Iranian bank branches for March 2009. Performance determined by product efficiency and effectiveness. We used two stage DEA model for calculate efficiency and effectiveness. In stage I we applied BCC model to efficiency evaluation, and in stage 2 we used BCC model to effectiveness evaluation too. Then overall performance calculated by product efficiency score and effectiveness score.