Slack-based measure of efficiency in the Chemicals and petroleum products’ manufacturing sector in Zimbabwe

Abstract

The study’s aim is to identify with precision the sources of inefficiency in the Chemicals and petroleum products manufacturing sector in Zimbabwe. Literature has shown that slack based methods of identifying efficiency levels can salvage decimation of any manufacturing sector. The DEA methodology used in this study used slacks based measure to identify input and output sources of inefficiency. ZIMSTAT data from the Chemicals and petroleum products manufacturing sector was used to calculate slacks in inputs; cost of raw materials (CM), energy (E), water and sewage (WS), cost of services (CS) and slacks in output; sales (S), value added (VA), gross value of production (GVP). Input E is the major input driver of efficiency and WS is the major input barrier to efficiency in the Chemicals and Petroleum Products manufacturing sub-sector using CRS. Overall slack analysis using CRS shows that output variable SLS is the major driver of efficiency while output variable VA is the major barrier to efficiency in the Chemicals and Petroleum Products manufacturing sub-sector. Using VRS, CM is the major input driver of efficiency while WS is the major input barrier to efficiency in the Chemicals and Petroleum Products manufacturing sub-sector. Using VRS, CM is the major input driver of efficiency while WS is the major input barrier to efficiency in the Chemicals and Petroleum Products manufacturing sub-sector. Overall slack analysis using VRS shows that output variable SLS is the major driver of efficiency in the Chemicals and Petroleum Products manufacturing sub-sector. Output variable VA is the major barrier to efficiency in the Chemicals and Petroleum Products manufacturing sub-sector.