NONRADIAL APPROACH TO ALLOCATING FIXED-COSTS AND COMMON REVENUE USING CENTRALIZED DEA

Sebastián Lozano ()
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Sebastián Lozano: Escuela Superior de Ingenieros, University of Seville, Camino de los Descubrimientos, s/n 41092 Seville, Spain

International Journal of Information Technology & Decision Making (IJITDM), 2014, vol. 13, issue 01, 29-46

Abstract: In this paper, a simple approach to allocating fixed costs and common revenue among different units is presented. It is based on centralized data envelopment analysis (DEA) and uses a weighted, slacks-based, nonradial metric. The approach is units-invariant and takes into account the inefficiencies in the assessed decision making units (DMUs). The approach works when the fixed cost is a complement of another input as well as when no other inputs exist. The proposed approach is compared with existing allocation methods using several datasets from the literature.

Keywords: Fixed cost; common revenue; centralized DEA; efficiency invariance; units invariance (search for similar items in EconPapers)
Date: 2014
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Citations: View citations in EconPapers (3)

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DOI: 10.1142/S0219622014500023

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