Bayesian and DEA efficiency modelling : an application to hospital foodservice operations

The significant impact of health foodservice operations on the total operational cost of the hospital sector has increased the need to improve the efficiency of these operations. Although important studies on the performance of foodservice operations have been published in various academic journals and industrial reports, the findings and implications remain simple and limited in scope and methodology. This paper investigates two popular methodologies in the efficiency literature: Bayesian "stochastic frontier analysis" (SFA) and "data envelopment analysis" (DEA). The paper discusses the statistical advantages of the Bayesian SFA and compares it with an extended DEA model. The results from a sample of 101 hospital foodservice operations show the existence of inefficiency in the sample, and indicate significant differences between the average efficiency generated by the Bayesian SFA and DEA models. The ranking of efficiency is, however, statistically independent of the methodologies.