Assessing Textile Factory Performance

This paper provides a way of assessing performance in for-profit sectors, such as, textile factories of Nanjing Textiles Corporation, China. The methods are closely related to the Farreal efficiency measure or data envelopment analysis (DEA). The paper studies the following three problems: (1) whether factory is operating at the minimum point of the long-run average cost curve; (2) whether there exists costless reduction in input; and (3) whether factory happens input congestion. The results show that the economic efficiency of textile factories in 1989 was worse than that in 1988, and different economic systems, state ownership and collective ownership may lead to distinct performances.