Making an ideal decision-making unit using virtual network data envelopment analysis approach

Saeed Yousefi, Hadi Shabanpour, Reza Farzipoor Saen and Gholam Reza Faramarzi

International Journal of Business Performance Management, 2014, vol. 15, issue 4, 316-328

Abstract: Data envelopment analysis (DEA) is a tool for measuring the relative efficiency of decision-making units (DMUs) that perform similar tasks. One of the uses of the DEA is the establishment of benchmarks for inefficient DMUs. These benchmarks play the role of target for inefficient DMUs. However, traditional DEA (TDEA) models fail to rank the efficient DMUs, and as a result, they cannot determine a benchmark for the inefficient DMUs. To overcome this shortcoming, this paper proposes virtual network DEA (NDEA) approach. The proposed method not only ranks the whole inefficient and efficient DMUs but also establishes a virtual benchmark called ideal DMU. The case study demonstrates the applicability of the proposed model.

Keywords: network DEA; data envelopment analysis; ideal DMUs; decision making units; relative efficiency; virtual benchmarking; virtual networks; virtual DEA; case study; best practice; DMU efficiency. (search for similar items in EconPapers)
Date: 2014
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