Study On Validity Analysis Of Size And Technology Of Refineries

Since 2001 year-end we joined in WTO, refineries in China have received a greatachievement by enhancing the management level, decreasing the cost and increasing thebenefit. Nowadays, the market of produced oil has been opened and those refineries face tonew competitive environment again. Recently, Chinese economy has developed greatly andthe demand of petroleum has increased dramatically. This situation provides refineries withmore room for development and more incentive competition. In this case, refineries shouldexploit their own potential, mend their shortages which exist in the long-term plannedeconomysystem,inordertodeveloptheircompetitivepower.At present,themethods ofvalidityanalysis includeproductionfunction,utilityfunction,composite indices, fuzzy synthetically evaluation, and data envelopment analysis (DEA forshort). Refineries are complex systemwith multiple input and output index so a single factoranalysis method is not fit for them. While data envelopment analysis which is based onrelative efficiency and evaluate units (firm or department) of the same nature according tomultiple input and output index can solve this problem. DEA evaluates units by comparingtheir relative efficiency with math programming model. By comprehensive analyzing theinput and output data, DEA can gain each unit's data index of their synthesized efficiency.Then rank the units and find the relatively efficient units. Finally find out the reasons anddegreeofinefficiency,providemanagementinformationtoleaderdepartment.This article firstly analyzes those commonly used methods of validity analysis andselects DEA to analyze the validity of refineries, then, gives them some suggestions andadvicesaccordingtotheresults.