Evaluation of cost-effectiveness and cost efficiency of network systems Case study: Bank branches

Effectiveness of the organization and its economic evaluation is one of the most effective factors for the success of managers in the progress and development of organizations. The banking industry is the most important sectors in any economic system. The banking system for economic financing must have an efficient and effective performance. In this paper, we proposed a new model for evaluating cost efficiency and effectiveness, with considering the interaction and relationship between the internal departments of the bank branches, which is able to determine how to make optimal use of available resources in each section. We analyze the features of the proposed model, also the effect of the relationship between the sections on cost effectiveness is determined. In this model, the relationship between the sections is examined in two modes, free and fixed communication; we have used the proposed model to determine the efficiency and cost-effectiveness of 26 branches of a commercial bank in Iran, in two state, constant return to scale (CRS) and variable return to scale (VRS) and comparison of the results of the two state is presented. The results show that a branch that is cost-effective in both section, it will not necessarily be cost-effective. In addition, this model can provide more accurate information to managers to make decisions by identifying ineffective factors in bank branches.