Linear fractional radial graph measure of efficiency of production

Lifen Wu

Journal of the Operational Research Society, 2019, vol. 70, issue 11, 2004-2018

Abstract: The linear fractional radial graph efficiency measure developed in this article is consistent with the definition of efficiency itself as a ratio of output to input, and has an interpretation of profitability as a ratio of revenue to cost. This measure embeds input and output radial efficiency measures which have cost and revenue interpretation respectively. As this graph measure does not have any path constraint, it can also be adapted to hyperbolic graph efficiency measure, generalised distance function, and directional distance function by imposing a path constraint. This measure, under a variable returns to scale assumption about the technology, provides feasible ways of scale inefficiency improvement within production possibility set. It also provides flexible ways of inefficiency improvement under constant returns to scale assumption. Profitability is maximised within technical efficiency context whenever scale efficiency is attained.

Date: 2019
References: Add references at CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://hdl.handle.net/10.1080/01605682.2018.1510807 (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:taf:tjorxx:v:70:y:2019:i:11:p:2004-2018

Ordering information: This journal article can be ordered from
http://www.tandfonline.com/pricing/journal/tjor20

DOI: 10.1080/01605682.2018.1510807

Access Statistics for this article

Journal of the Operational Research Society is currently edited by Tom Archibald

More articles in Journal of the Operational Research Society from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().