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A linear formulation of the two-level DEA model

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  • Kao, Chiang

Abstract

In efficiency measurement, the input and output factors of similar characteristics can be grouped into input and output categories, respectively, using a weighted-average approach under the data envelopment analysis (DEA) framework to form a two-level DEA model. The resulting two-level model is nonlinear. This note transforms the nonlinear model into a linear one using a variable substitution technique. Linear models are easier to solve than their nonlinear counterparts. The linear transformation is applicable to the two-level model built from both the primal and dual forms of the conventional one-level DEA model. The linear model transformed from the nonlinear model developed from the primal form has a dual which is equivalent to the nonlinear model developed from the dual form.

Suggested Citation

  • Kao, Chiang, 2008. "A linear formulation of the two-level DEA model," Omega, Elsevier, vol. 36(6), pages 958-962, December.
    • Handle: RePEc:eee:jomega:v:36:y:2008:i:6:p:958-962
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    References listed on IDEAS

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    1. Kao, Chiang & Hung, Hsi-Tai, 2007. "Management performance: An empirical study of the manufacturing companies in Taiwan," Omega, Elsevier, vol. 35(2), pages 152-160, April.
    2. Eilat, Harel & Golany, Boaz & Shtub, Avraham, 2008. "R&D project evaluation: An integrated DEA and balanced scorecard approach," Omega, Elsevier, vol. 36(5), pages 895-912, October.
    3. Kao, Chiang & Wu, Wann-Yih & Hsieh, Wen-Jen & Wang, Tai-Yue & Lin, Chinho & Chen, Liang-Hsuan, 2008. "Measuring the national competitiveness of Southeast Asian countries," European Journal of Operational Research, Elsevier, vol. 187(2), pages 613-628, June.
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    5. C Kao & Y-C Lin, 2004. "Evaluation of the university libraries in Taiwan: total measure versus ratio measure," Journal of the Operational Research Society, Palgrave Macmillan;The OR Society, vol. 55(12), pages 1256-1265, December.
    6. Charnes, A. & Cooper, W. W., 1984. "The non-archimedean CCR ratio for efficiency analysis: A rejoinder to Boyd and Fare," European Journal of Operational Research, Elsevier, vol. 15(3), pages 333-334, March.
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