The fair allocation of common fixed cost or revenue using DEA concept

M. Khodabakhshi () and K. Aryavash ()

Annals of Operations Research, 2014, vol. 214, issue 1, 187-194

Abstract: The common fixed cost or revenue distribution amongst decision making units (briefly, DMUs) in an equitable way is one of the problems that can be solved by data envelopment analysis (DEA) concept. The motivation of this paper is common fixed cost or revenue allocation based on following three principles: First, allocation must be directly proportional to the elements (inputs and outputs) that are directly proportional to imposed common fixed cost or to obtained common fixed revenue. Second, allocation must be inversely proportional to the elements that are inversely proportional to common fixed cost or revenue. Finally, the elements that have no effect on common fixed cost or revenue must have no effect on allocation as well. Copyright Springer Science+Business Media, LLC 2014

Keywords: Data envelopment analysis; Fixed cost allocation; Fair allocation (search for similar items in EconPapers)
Date: 2014
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Citations: View citations in EconPapers (22)

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DOI: 10.1007/s10479-012-1117-2

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