Development of a hybrid financial performance measurement model using AHP and DOE methods for Turkish commercial banks

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Iç Y. T., Yurdakul M., Pehlivan E.

SOFT COMPUTING, cilt.26, sa.6, ss.2959-2979, 2022 (SCI-Expanded) identifier identifier

  • Yayın Türü: Makale / Tam Makale
  • Cilt numarası: 26 Sayı: 6
  • Basım Tarihi: 2022
  • Doi Numarası: 10.1007/s00500-021-06589-1
  • Dergi Adı: SOFT COMPUTING
  • Derginin Tarandığı İndeksler: Science Citation Index Expanded (SCI-EXPANDED), Scopus, Academic Search Premier, Applied Science & Technology Source, Compendex, Computer & Applied Sciences, INSPEC, zbMATH
  • Sayfa Sayıları: ss.2959-2979
  • Anahtar Kelimeler: Banking and finance, Performance evaluation, Multi-criteria decision-making (MCDM), Analytic hierarchy process (AHP), Financial ratios, Design of experiments (DOE), DECISION-MAKING, FUZZY TOPSIS, DESIGN, SIMULATION, MANAGEMENT, SELECTION, CAMELS
  • Gazi Üniversitesi Adresli: Evet

Özet

Financial performances of commercial banks are commonly determined with various multi-criteria decision-making (MCDM) models. For example, Analytic Hierarchy Process (AHP) method is one of the most widely used MCDM approaches in the formation of performance measurement models. In this study, a hybrid model is developed with the usage of AHP and Design of Experiments (DOE) to obtain overall financial performance scores by combining performance scores at the financial ratios for 18 Turkish commercial banks and their rankings within the commercial banking sector. In obtaining performance scores of the banks at the financial ratios the rationing process is used. In the applied rationing process, three different thresholds (quartiles: Q(1), Q(2), and Q(3)) are determined for each financial ratio. In the paper, the results of the proposed hybrid model are compared with the results of the AHP approach to determine its advantages over the usage of the AHP approach alone. The comparisons show that the hybrid model provides statistically similar but more robust performance scores and ranking results.