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A modified slacks-based measure of efficiency in data envelopment analysis

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  • Tone, Kaoru
  • Toloo, Mehdi
  • Izadikhah, Mohammad

Abstract

The slacks-based measure (SBM) model can divide the set of observations into two mutually exclusive and collectively exhaustive sets: efficient and inefficient. However, it fails to provide more details about efficient DMUs, which reveals the lack of discrimination power in the SBM model. With the aim of addressing this issue, the super SBM (SupSBM) model has been suggested which can rank the SBM-efficient DMUs without providing any useful information about SBM-inefficient DMUs. As a result, in order to fully rank both efficient and inefficient DMUs, one needs to run both SBM and SupSBM models which leads to a significant increase in the number of required computations. This paper tackles this problem and modifies the SBM model which measures SBM-efficiency score for inefficient DMUs and SupSBM-efficiency score for strong efficient DMUs, simultaneously. Finally, a simulation study is presented to illustrate the superiority of our proposed model over the existing models with various problem sizes.

Suggested Citation

  • Tone, Kaoru & Toloo, Mehdi & Izadikhah, Mohammad, 2020. "A modified slacks-based measure of efficiency in data envelopment analysis," European Journal of Operational Research, Elsevier, vol. 287(2), pages 560-571.
    • Handle: RePEc:eee:ejores:v:287:y:2020:i:2:p:560-571
    DOI: 10.1016/j.ejor.2020.04.019
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