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Bridging radial and non-radial measures of efficiency inDEA

Bridging radial and non-radial measures of efficiency inDEA Data envelopment analysis (DEA) has been utilized worldwide for measuring efficiencies of banks, telecommunications, electric utilities and so forth. Yet, the existing models have some well-known shortcomings that limit their usefulness. In DEA we have two fundamental approaches to measuring efficiency with very different characteristics; radial and non-radial. We demonstrate a method for linking these two approaches in a unified framework called Connected-SBM (slacks-based measure). It includes two scalar parameters, and by changing the parameter values we can relocate the analysis anywhere between the radial and the non-radial models. An appropriate choice of these parameters can overcome the key shortcomings inherent in the two approaches, namely, proportionality and mixed patterns of slacks. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Annals of Operations Research Springer Journals

Bridging radial and non-radial measures of efficiency inDEA

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References (10)

Publisher
Springer Journals
Copyright
Copyright © 2008 by Springer Science+Business Media, LLC
Subject
Business and Management; Operation Research/Decision Theory; Combinatorics; Theory of Computation
ISSN
0254-5330
eISSN
1572-9338
DOI
10.1007/s10479-008-0356-8
Publisher site
See Article on Publisher Site

Abstract

Data envelopment analysis (DEA) has been utilized worldwide for measuring efficiencies of banks, telecommunications, electric utilities and so forth. Yet, the existing models have some well-known shortcomings that limit their usefulness. In DEA we have two fundamental approaches to measuring efficiency with very different characteristics; radial and non-radial. We demonstrate a method for linking these two approaches in a unified framework called Connected-SBM (slacks-based measure). It includes two scalar parameters, and by changing the parameter values we can relocate the analysis anywhere between the radial and the non-radial models. An appropriate choice of these parameters can overcome the key shortcomings inherent in the two approaches, namely, proportionality and mixed patterns of slacks.

Journal

Annals of Operations Research – Springer Journals

Published: May 31, 2008

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