Simulation-based performance measurement: assessing the purchasing process in a public university

Performance measurement is becoming a must in the public sector in Italy, just as in other frontline economies. Public services have to be supplied to citizens under diminishing resources, but pursuing growing target levels as if they were operating in a competitive market. Discrete-event simulation is challenging as an effective methodology for a quantitative evaluation of different practices in non-profit organizations characterized by socio-technical environments guided by the central government’s changing normative and often conflicting multiple stakeholders. This paper focuses on a scientific Department of an Italian University, after that a performance measurement and evaluation system has been adopted by the Board of Directors as required by recent laws aimed at increasing the level of accountability. A case study is described in which the “purchasing process” is analyzed by stochastic simulation in order to account for limited resources under various sources of uncertainty. Numerical results are presented to support possible managerial decisions towards improved efficiency, effectiveness and transparency in purchasing operations.