Improved efficiency measures through directional distance formulation of data envelopment analysis

Ali Diabat, Udaya Shetty, T. Pakkala

    Research output: Contribution to journalArticle

    Abstract

    This paper develops a model for an improved efficiency measure through directional distance formulation of data envelopment analysis. It deals with cases where positive and negative values co-exist as production factors. The developed model has properties such as scalar quantity for measuring efficiency and it identifies all sources of inefficiency. The measure is weakly monotonic; units and translation do not vary with respect to inputs and outputs. The proposed model, under some restrictions, reduces to basic Data Envelopment Analysis (DEA) models such as Charnes-Cooper-Rhodes (CCR), Banker-Charnes-Cooper (BCC), and a slack based model (SBM). In addition to the above, the proposed model includes the closest targets for a given inefficient unit to achieve efficiency with less effort. The proposed model is validated using a case study done on Information Technology firms operating in India.

    Original languageEnglish (US)
    Pages (from-to)325-346
    Number of pages22
    JournalAnnals of Operations Research
    Volume229
    Issue number1
    DOIs
    StatePublished - Jan 1 2015

    Fingerprint

    Efficiency measures
    Data envelopment analysis
    India
    Bankers
    Inefficiency
    Factors

    Keywords

    • Data envelopment analysis
    • Directional distance function
    • Efficiency
    • Non-radial efficiency

    ASJC Scopus subject areas

    • Decision Sciences(all)
    • Management Science and Operations Research

    Cite this

    Improved efficiency measures through directional distance formulation of data envelopment analysis. / Diabat, Ali; Shetty, Udaya; Pakkala, T.

    In: Annals of Operations Research, Vol. 229, No. 1, 01.01.2015, p. 325-346.

    Research output: Contribution to journalArticle

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