A new method for evaluating decision making units in DEA

Dariush Khezrimotlagh, Shaharuddin Salleh and Zahra Mohsenpour
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Dariush Khezrimotlagh: Department of Mathematics, Faculty of Science, Johor, Malaysia
Shaharuddin Salleh: Department of Mathematics, Faculty of Science, Johor, Malaysia
Zahra Mohsenpour: Department of Mathematics, Faculty of Science, Johor, Malaysia

Journal of the Operational Research Society, 2014, vol. 65, issue 5, 694-707

Abstract: This paper provides a new structure in data envelopment analysis (DEA) for assessing the performance of decision making units (DMUs). It proposes a technique to estimate the DEA efficient frontier based on the Arash Method in a way different from the statistical inferences. The technique allows decisions in the target regions instead of points to benchmark DMUs without requiring any more information in the case of interval/fuzzy DEA methods. It suggests three efficiency indexes, called the lowest, technical and highest efficiency scores, for each DMU where small errors occur in both input and output components of the Farrell frontier, even if the data are accurate. These efficiency indexes provide a sensitivity index for each DMU and arrange both inefficient and technically efficient DMUs together while simultaneously detecting and benchmarking outliers. Two numerical examples depicted the validity of the proposed method.

Date: 2014
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