Measuring individual efficiency and unit influence in centrally managed systems

Mostafa Davtalab-Olyaie (), Hadis Mahmudi-Baram and Masoud Asgharian ()
Additional contact information
Mostafa Davtalab-Olyaie: University of Kashan
Hadis Mahmudi-Baram: University of Kashan
Masoud Asgharian: McGill University

Annals of Operations Research, 2023, vol. 321, issue 1, No 6, 139-164

Abstract: Abstract A centrally managed system (CMS) typically comprises several decision making units (DMUs) that operate under a central DMU. The central DMU allocates the total available resources under its control among different DMUs to optimize the performance of the whole system. This distinguishing feature is at the heart of centralized resource allocation (CRA) methods and should be taken into account when assessing individual efficiency of each DMU in CMS. We introduce a slacks-based model for measuring individual efficiency of each DMU in CMS. As we will discuss, there are different possible CRA plans leading different projection points of DMUs on the frontier of the production possibility set (PPS). We will however show that all DMUs are projected on the same supporting hyperplane of the PPS under all CRA plans. We therefore have a common reference base, a subset of the ordinary efficient frontier, using which individual efficiency of each DMU can be measured in CMS. Having measured the individual efficiency of each DMU, we can categorize the DMUs into CRA-efficient and CRA-inefficient. To distinguish between CRA-efficient DMUs, we further introduce an influence index that measures the maximum effect of a specific CRA-efficient DMU on the construction of the projection points of the DMUs in CMS. We then propose a linear model to measure the influence of each CRA-efficient DMU. We can therefore provide a complete ranking of the DMUs in CMS. The proposed approach is demonstrated using a real data set.

Keywords: Data envelopment analysis; Centralized management; Individual efficiency; Influence matrix; Ranking (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://link.springer.com/10.1007/s10479-022-04676-6 Abstract (text/html)
Access to the full text of the articles in this series is restricted.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:spr:annopr:v:321:y:2023:i:1:d:10.1007_s10479-022-04676-6

Ordering information: This journal article can be ordered from
http://www.springer.com/journal/10479

DOI: 10.1007/s10479-022-04676-6

Access Statistics for this article

Annals of Operations Research is currently edited by Endre Boros

More articles in Annals of Operations Research from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().