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Centralized DEA models with the possibility of downsizing

Author

Listed:
  • S Lozano

    (Escuela Superior de Ingenieros, Avda. de los Descubrimientos)

  • G Villa

    (Escuela Superior de Ingenieros, Avda. de los Descubrimientos)

Abstract

While traditional data envelopment analysis (DEA) models assess the relative efficiency of similar, independent decision making units (DMUs) centralized DEA models aim at reallocating inputs and outputs among the units setting new input and output targets for each one. This system point of view is appropriate when the DMUs belong to a common organization that allocates their inputs and appropriates their outputs. This intraorganizational perspective opens up the possibility that greater technical efficiency for the organization as a whole might be achieved by closing down some of the existing DMUs. In this paper, we present three centralized DEA models that take advantage of this possibility. Although these models involve some binary variables, we present efficient solution approaches based on Linear Programming. We also present some numerical results of the proposed models for a small problem from the literature.

Suggested Citation

  • S Lozano & G Villa, 2005. "Centralized DEA models with the possibility of downsizing," Journal of the Operational Research Society, Palgrave Macmillan;The OR Society, vol. 56(4), pages 357-364, April.
    • Handle: RePEc:pal:jorsoc:v:56:y:2005:i:4:d:10.1057_palgrave.jors.2601838
    DOI: 10.1057/palgrave.jors.2601838
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    References listed on IDEAS

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