The evaluation of contractors based on financial data using Data Envelopment Analysis

grantor: University of TorontoThe increased number of business failures in the construction industry reflects the need to develop new tools to evaluate contractor performance. Data Envelopment Analysis (DEA) is a powerful analytical tool that has the versatility to give a single measure of performance while simultaneously handling the multiple inputs and outputs that represent the most significant factors involved in a construction company's activities. The goals of this work were to develop a model based on DEA methodology capable of accurately assessing the financial performance of contractors and to utilize the model to provide a set of financial benchmarks. This provided insight into the performance levels being achieved in different locations across Canada and in different segments of the industry, namely, building, heavy civil, and specialty construction. The results of this study have provided benchmarks that managers can utilize to increase company efficiency in the construction industry, thereby, promoting an environment of excellence.M.A.Sc