Measuring Effectiveness: A DEA Approach Under Predetermined Targets

Heinz Ahn and Ludmila Neumann
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Heinz Ahn: Institute of Management Control & Business Accounting, Technische Universität Braunschweig, Braunschweig, Germany
Ludmila Neumann: Institute of Management Control & Business Accounting, Technische Universität Braunschweig, Braunschweig, Germany

International Journal of Business Analytics (IJBAN), 2014, vol. 1, issue 1, 16-28

Abstract: This paper presents a Data Envelopment Analysis approach that evaluates the relative effectiveness of decision making units (DMUs) in the presence of predetermined targets which are to be achieved simultaneously. As such targets are a core element of common performance management systems, the approach is a desirable complement of these systems. The proposed method classifies the DMUs into subsets according to their ability to meet the targets and provides a complete ranking within each subset on the basis of a measure of relative effectiveness. For that purpose, we introduce a new concept called super-effectiveness. The approach is illustrated by means of an example referring to a European pharmacy chain.

Date: 2014
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Persistent link: https://EconPapers.repec.org/RePEc:igg:jban00:v:1:y:2014:i:1:p:16-28

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