DEA Efficiency Region for Variations of Inputs and Outputs

Mohammad Khoveyni and Robabeh Eslami
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Mohammad Khoveyni: Department of Applied Mathematics, Yadegar-e-Imam Khomeini (RAH), Shahre Rey Branch, Islamic Azad University, Tehran, Iran
Robabeh Eslami: Department of Mathematics, Faculty of Technology and Engineering, South Tehran Branch, Islamic Azad University, Tehran, Iran

International Journal of Information Technology & Decision Making (IJITDM), 2021, vol. 20, issue 02, 707-732

Abstract: Finding efficiency regions (ERs) for extremely efficient decision-making units (DMUs) is one of the important issues from the managerial and economic viewpoints. An extremely efficient DMU will remain efficient if and only if after changing its inputs and/or its outputs this DMU stays within its ER. Thus, by applying the ER information, decision maker(s) of the evaluated extremely efficient DMU can precisely understand the values of input(s) increment and output(s) decrement of this DMU so that it remains efficient. Hence, in this study, we propose a data envelopment analysis (DEA) approach based on the defining hyperplanes of the production possibility set (PPS), which is capable of finding the ERs of the DMUs when their inputs increase and/or their outputs decrease. To demonstrate the applicability of the proposed approach, in the real world, a numerical example and an empirical application to the banking industry in the Czech Republic are provided.

Keywords: Data envelopment analysis (DEA); efficiency; production possibility set (PPS); efficiency region (ER); sensitivity analysis (search for similar items in EconPapers)
Date: 2021
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DOI: 10.1142/S0219622021500103

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