One of the most important effective elements in economic growth is the efficiency of manufacturing units. Therefore, measuring the efficiency of firms is necessary in order to increase efficiency in future planning courses. In the current research, using Stochastic Frontier Production Function, the efficiency of firms in Tehran Stock Exchange has been measured. In the above method, the efficient frontier is determined by using the Trans log production function, and the efficiency of each firm measured by the efficient frontier. The most important superiority of Stochastic Frontier Production Function is to specify the role of random and environmental elements (out of firm authorities) and inter-organizational elements (in-firm authorities) to assess the inefficiency of firms as compared to other methods. Thus, 105 firms were selected using maximum likelihood method in 2008-2017 to evaluate the research model. Results indicated that the minerals industry and cement industry with the averages of 53% and 90% had the least and most efficiency values, respectively. Separating the inefficiency values showed that the food industry and chemicals industry had the least and most inefficiency resulting from the firm authorities as 33.6% and 95.2%, respectively. According to research results, financial analysts and investors are recommended to rank the efficiency and assess the performance based on the firm authorities. Due to the importance of efficiency measurement in operational auditing, the auditors are recommended to use the current research model to assess the firm’s efficiency. Also, Organization of Industries and Mines is suggested to tackle the obstacles after identifying the elements out of firm authorities which affect the inefficiency in the firms.
