ABSTRACT
The idea of 'efficiency' and its measurement has become a key evaluation method within transport studies, and most research questions have related to one form or other of the organisation of the supply side of the industry or the more general operating environment. This chapter focuses on the conceptual ideas and issues rather than the technical elements involved in undertaking efficiency assessments. Moving on directly to production theory, the first issue is to consider the extent to which output changes with regard to varying levels of the inputs. This relationship between output and input is known as the production function, and is key in efficiency assessment. The advantage of the Partial Productivity Measures (PPM) approach is that the required data are easy to collect, analyse and understand, and are favoured by managers and consultants in the transportation business when developing key performance indicators (KPIs).
