Efficiency Measurement: An Application of Data Envelopment Analysis (DEA) on Natural Gas Marketing Companies in Bangladesh

Performance evaluation is crucial for companies to monitor their efficiency and economic status. In the context of the natural gas marketing companies in Bangladesh, their profitability has declined, leading to challenges in meeting demand. The main objective of the study is to measure the efficiency and total factor productivity changes. For five natural gas marketing companies, 10 years of data were analyzed to measure efficiency. Both non-financial indicators (input purchase units, workforce, No. of customers, length of distribution network, output- sales units) and financial indicators (input capital, cost of goods sold, operating expenses, total assets, output- profit) are used to measure efficient by applying Data envelopment analysis (DEA) and Malmquist DEA. Based on the result, newly established companies are more efficient, and the total factor productivity growth is better. To become more productive and move up to the position of an efficient company, the inefficient one should cut down on its excessive input components. The management should optimize employee use and renovate the distribution network with new technology. Innovation in technology and infrastructure development, such as AI systems for operation, leakage findings and maintenance, pressure control, online metering, and metering for all types of customers, can improve technological efficiency and reduce system loss.