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Efficiency measures and computational approaches for data envelopment analysis models with ratio inputs and outputs

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  • Olesen, Ole Bent
  • Petersen, Niels Christian
  • Podinovski, Victor V.

Abstract

In a recent paper to this journal, the authors developed a methodology that allows the incorporation of ratio inputs and outputs in the variable and constant returns-to-scale DEA models. Practical evaluation of efficiency of decision making units (DMUs) in such models generally goes beyond the application of standard linear programming techniques. In this paper we discuss how the DEA models with ratio measures can be solved. We also introduce a new type of potential ratio (PR) inefficiency. It characterizes DMUs that are strongly efficient in the model of technology with ratio measures but become inefficient if the volume data used to calculate ratio measures become available. Potential ratio inefficiency can be tested by the programming approaches developed in this paper.

Suggested Citation

  • Olesen, Ole Bent & Petersen, Niels Christian & Podinovski, Victor V., 2017. "Efficiency measures and computational approaches for data envelopment analysis models with ratio inputs and outputs," European Journal of Operational Research, Elsevier, vol. 261(2), pages 640-655.
    • Handle: RePEc:eee:ejores:v:261:y:2017:i:2:p:640-655
    DOI: 10.1016/j.ejor.2017.02.021
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    8. Ole Bent Olesen & Niels Christian Petersen & Victor V. Podinovski, 2022. "Scale characteristics of variable returns-to-scale production technologies with ratio inputs and outputs," Annals of Operations Research, Springer, vol. 318(1), pages 383-423, November.
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    12. Victor V. Podinovski & Ole Bent Olesen & Cláudia S. Sarrico, 2018. "Nonparametric Production Technologies with Multiple Component Processes," Operations Research, INFORMS, vol. 66(1), pages 282-300, January.
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    15. Podinovski, Victor V. & Wu, Junlin & Argyris, Nikolaos, 2024. "Production trade-offs in models of data envelopment analysis with ratio inputs and outputs: An application to schools in England," European Journal of Operational Research, Elsevier, vol. 313(1), pages 359-372.
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    19. Mohammad Reza Mozaffari & Sahar Ostovan & Peter Fernandes Wanke, 2020. "A Hybrid Genetic Algorithm-Ratio DEA Approach for Assessing Sustainable Efficiency in Two-Echelon Supply Chains," Sustainability, MDPI, vol. 12(19), pages 1-17, September.
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