DEA-based competition strategy in the presence of undesirable products: An application to paper mills

Alireza Amirteimoori () and Simin Masrouri

Operations Research and Decisions, 2021, vol. 31, issue 2, 5-21

Abstract: In real applications of data envelopment analysis (DEA), there are cases in which undesirable outputs are produced along with desirable outputs in such a way that the total sum of the produced undesirable outputs over the production units must be fixed and constant. In this case, a trade-off between the decision-making units (DMUs) is needed to balance the production of undesirable outputs. In a rational sight, this trade-off is done in such a way that all DMUs improve their relative performances. In this paper, a single DEA-based model is proposed to model fixed and variable-sum undesirable outputs in production processes. A common equilibrium efficient frontier is constructed and after reallocating the input/output factors, all decision-making units (DMUs) prevail as efficient. A real case of 32 paper mills in China is given. The results of the analysis demonstrated that some economically developed paper mills have better performance than less developed paper mills; in particular, all efficient paper mills are the developed ones.

Keywords: data envelopment analysis; equilibrium efficient frontier; undesirable outputs; efficiency. (search for similar items in EconPapers)
Date: 2021
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Persistent link: https://EconPapers.repec.org/RePEc:wut:journl:v:31:y:2021:i:2:p:5-20:id:1583

DOI: 10.37190/ord210201

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