Best cooperative partner selection and input resource reallocation using DEA

Jie Wu, Qingyuan Zhu, Wade D Cook and Joe Zhu ()
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Jie Wu: University of Science and Technology of China
Qingyuan Zhu: University of Science and Technology of China
Wade D Cook: York University
Joe Zhu: Worcester Polytechnic Institute

Journal of the Operational Research Society, 2016, vol. 67, issue 9, 1221-1237

Abstract: Abstract Reallocation of input resources (RIR) is a process by which certain decision making units (DMUs) reallocate resources among themselves; a process that occurs frequently in many enterprises. In this paper, a new data envelopment analysis (DEA) approach is developed to select the best cooperative partner DMU. Context-dependent DEA is used to identify the different levels of best-practice frontiers. Two DEA-based models are established for two cooperative scenarios, namely, resources pooling only and best-practice sharing. A cooperative method is applied to determine how to reallocate the input resources, and Shapley value is used to estimate the revenue changes that the various DMUs should expect after RIR. Two different situations with different objectives are considered. One objective is to maximize total revenue for the partnership, while the other is to maximize the Shapley value. The proposed approaches are illustrated with two examples.

Keywords: data envelopment analysis (DEA); reallocation of input resources (RIR); Shapley value; context-dependent DEA (search for similar items in EconPapers)
Date: 2016
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Citations: View citations in EconPapers (8)

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DOI: 10.1057/jors.2016.26

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