An Analysis of the Efficiency of Central Costs in Large-Scale Enterprises (Groups)

In the input of production and operations in large-scale enterprises (groups), central costs have now involved a wider scope, more varieties and larger amounts, and therefore central costs are becoming more and more important how to business performances. The change makes it more and more important to analyze and evaluate the input scale and structures of central costs. The appraisal of common costs such as central costs is always a puzzle in business management. This paper begins with the structures of central costs, introduces Data Envelopment Analysis (DEA) method to analyze and evaluate the central costs, and determines the optimal scale and structure of central costs so as to ensure the input efficiency of central costs and eventually provide large-scale enterprises with scientific and rational basis for allocation and reallocation of central costs and at the same time provide scientific and accurate information for decision costs.