Evaluating Transit: The Performance Tree Method

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by Darold T. Barnum, Univ of Illinois at Chicago, Chicago, IL, USA,

Document Type: Proceeding Paper

Part of: Managing Urban Transportation as a Business

Abstract: The objective of this paper is to demonstrate a methodology for choosing financial performance indicators that encourages identification of the relationships among indicators, permits the measurement of each indicator's influence on overall financial outcomes, ascertains that no elements of financial performance are inadvertently overlooked or double counted, and encourages consideration of the organization's goals and strategy. The basic methodology proceeds as follows. First, an indicator that measures overall financial outcomes is defined. Then, this comprehensive indicator is subdivided into a set of second-level indicators that affect the comprehensive indicator's value, with the set accounting for all influences on the comprehensive measure. Next, each of the subdivision process continues until the most detailed measures of interest are reached. Use of the procedure is illustrated by developing a partial set of financial performance indicators.

Subject Headings: Financial management | Trees | Highway and road management | Permits | Business organizations | Mathematics |

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