A Dominance-Based Network Method for Ranking Efficient Decision-Making Units in Data Envelopment Analysis

Jiyoung Lee and Gyunghyun Choi
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Jiyoung Lee: Department of Industrial Engineering, Hanyang University, 222 Wangsimni-ro, Seongdong-gu, Seoul 04763, Korea
Gyunghyun Choi: Graduate School of Technology and Innovation Management, Hanyang University, 222 Wangsimni-ro, Seongdong-gu, Seoul 04763, Korea

Sustainability, 2019, vol. 11, issue 7, 1-20

Abstract: Ranking of efficient decision-making units (DMUs) using data envelopment analysis (DEA) results is very important for various purposes. We propose a new comprehensive ranking method using network analysis for efficient DMUs to improve the discriminating power of DEA. This ranking method uses a measure, namely dominance value, which is a network centrality-based indicator. Thus far, existing methods exploiting DMU’s positional features use either the superiority, which considers the efficient DMUs’ relative position on the frontier compared to other DMUs, or the influence, which captures the importance of the DMUs’ role as benchmarking targets for inefficient DMUs. However, in this research, the dominance value is the compounded measure of both core positional features of DMUs. Moreover, a network representation technique has been used to ensure the performance of the dominance value compared to the superiority and influence. To demonstrate the proposed ranking method, we present two examples, research and development (R&D) efficiency of small and medium-sized enterprises (SMEs) and technical efficiency of plug-in hybrid electric vehicles (HEVs). Through these two examples, we can see how the known weaknesses and the unobserved points in the existing method differ in this new method. Hence, it is expected that the proposed method provides another new meaningful ranking result that can show different implications.

Keywords: data envelopment analysis; ranking; dominance value; network centrality; sustainability (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2019
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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