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Efficiency measures and computational approaches for data envelopment analysis models with ratio inputs and outputs

Ole Bent Olesen, Niels Christian Petersen and Victor V. Podinovski

European Journal of Operational Research, 2017, vol. 261, issue 2, 640-655

Abstract: In a recent paper to this journal, the authors developed a methodology that allows the incorporation of ratio inputs and outputs in the variable and constant returns-to-scale DEA models. Practical evaluation of efficiency of decision making units (DMUs) in such models generally goes beyond the application of standard linear programming techniques. In this paper we discuss how the DEA models with ratio measures can be solved. We also introduce a new type of potential ratio (PR) inefficiency. It characterizes DMUs that are strongly efficient in the model of technology with ratio measures but become inefficient if the volume data used to calculate ratio measures become available. Potential ratio inefficiency can be tested by the programming approaches developed in this paper.

Keywords: Data envelopment analysis; Ratio measures; Efficiency (search for similar items in EconPapers)
Date: 2017
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Citations: View citations in EconPapers (25)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ejores:v:261:y:2017:i:2:p:640-655

DOI: 10.1016/j.ejor.2017.02.021

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European Journal of Operational Research is currently edited by Roman Slowinski, Jesus Artalejo, Jean-Charles. Billaut, Robert Dyson and Lorenzo Peccati

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