Buffered-ranking intervals for virtual profit efficiency analysis

Yongqiao Wang (), He Ni () and Stan Uryasev ()
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Yongqiao Wang: Zhejiang Gongshang University
He Ni: Zhejiang Gongshang University
Stan Uryasev: Stony Brook University

Central European Journal of Operations Research, 2023, vol. 31, issue 4, No 7, 1149-1181

Abstract: Abstract The efficiency ranking of a decision making units (DMU) measures its relative position among a group of DMUs over sets of feasible virtual prices that characterize preferences for input and output variables. But the efficiency ranking of a DMU conveys no information about the gap between this DMU and those superior and peer DMUs. So we propose an alternative efficiency measure named buffered-ranking for efficiency analysis. The statement that the efficiency buffered-ranking of a DMU is k implies that its efficiency score reaches the average of the top k efficiency scores of all DMUs. The proposed buffered-ranking is monotone with the conventional ranking, and conveys more information about its relation with superior and peer DMUs. When the efficiency score is based on virtual profit, i.e. the difference between virtual revenue and virtual cost, the calculation of the best buffered-ranking is equivalent to a continuous linear program. We also study the worst buffered-ranking that is opposite to the best buffered-ranking. Experiments demonstrate the advantages of buffered-ranking over conventional ranking.

Keywords: Buffered-ranking; Virtual profit efficiency; Linear program; bPOE (search for similar items in EconPapers)
Date: 2023
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DOI: 10.1007/s10100-023-00847-3

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