Data Envelopment Analysis and the Quest for Targets – a Case Study in Connection to Waste Reduction on Site

Aerson Moreira Barreto1, Luiz Fernando Mählmann Heineck2, Luiz Antonio Freire Pinto Silveira3 & Thais Moreira de Vasconcelos4

1Professor, Civil Engineering., Rural Federal University of Semi-arid , Rua Gamaliel Martins Bezerra, SN, Alto da alegria, University campus, Angicos/RN, CEP: 59.515-000, Brazil, Phone +55 (84) 98379811, aersonbarreto@ufersa.edu.br
2Professor, Civil Engineering. Department of Mechanical Engineering and Operations, Campus do Pici, Federal University of Ceará, Brazil, Phone +55 (85) 97152754, freitas8@terra.com.br
3Graduate Student in Civil Engineering, Rural Federal University of Semi-arid , Rua Gamaliel Martins Bezerra, SN, Alto da Alegria, Unievrsity Campus, Angicos/RN, CEP: 59.515-000, Brazil, Phone +55 (84) 99587475, luizinhuu00@hotmail.com
4Architect, University of Fortaleza, Rua Vicente Leite, 497, Apto 500, Meireles, Fortaleza, CEP: 60170-150, Brazil, Phone +55 (85) 91999069, thaismor@gmail.com

Abstract

Target costing is addressed in this research work based on statistics and data collection on building developments. Contrary to standard practices that claim target costing should not be based on any distracting previous cost experiences, this paper introduces DEA - Data Envelopment Analysis – a linear programming technique capable of drawing an efficient frontier for a set of performance data (site waste reduction in this research paper). Such performance frontier departs from standard cost estimating practices that deal with average or percentile performance: target values are now obtained according with the best performances a set of observations is capable of displaying: what in normal circumstances is taken as an outlier is now investigated in connection to the causes underneath such outstanding performance. DEA’s efficient frontier is akin to the concept of opportunity costs as fundamental to microeconomics. Target setting is exemplified through a site waste evaluation of a number of building sites, each one conducted according to different levels of managerial effort geared to improve this aspect of lean production goal. Results point to the range of management actions that might be chosen by administrative site personnel, in different sets, employing a parsimonious number of them, according to the specific circumstances of each building site.

Keywords

Target Costing, DEA, Efficiency Frontier, Waste construction

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Reference

Barreto, A.M. , Heineck, L.F.M. , Silveira, L.A.F.P. & Vasconcelos, T.M.D. 2014, 'Data Envelopment Analysis and the Quest for Targets – a Case Study in Connection to Waste Reduction on Site ' In:, Kalsaas, B.T., Koskela, L. & Saurin, T.A., 22nd Annual Conference of the International Group for Lean Construction. Oslo, Norway, 25-27 Jun 2014. pp 801-810

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