Measuring the relative balance of DMUs

Heinz Ahn, Ludmila Neumann and Nadia Vazquez Novoa

European Journal of Operational Research, 2012, vol. 221, issue 2, 417-423

Abstract: In basic Data Envelopment Analysis (DEA) models, the weights of performance criteria are endogenously determined, assigning to each decision-making unit (DMU) its best possible efficiency score. This property is widely considered to be a major strength of the method, but it is also a source of considerable problems concerning performance assessment and performance control. Such problems result from the possibility of zero-value weights that exclude criteria from the evaluation. Unlike approaches that deal with this issue by incorporating value judgments into the analysis, we suggest a complementary balance score that is derived from the given data set. This score evaluates the extent to which a DMU avoids concentration on only some of the crucial performance criteria. One of the possible decisions resulting from a balance analysis is to reduce the set of DMUs considered to serve as benchmarks. For this case, a modified CCR–O model is presented.

Keywords: Data Envelopment Analysis; Zero-value weights; Balance score; Inappropriate benchmarks (search for similar items in EconPapers)
Date: 2012
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Citations: View citations in EconPapers (6)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ejores:v:221:y:2012:i:2:p:417-423

DOI: 10.1016/j.ejor.2012.03.030

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