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Best cooperative partner selection and input resource reallocation using DEA

Author

Listed:
  • Jie Wu

    (University of Science and Technology of China)

  • Qingyuan Zhu

    (University of Science and Technology of China)

  • Wade D Cook

    (York University)

  • Joe Zhu

    (Worcester Polytechnic Institute)

Abstract

Reallocation of input resources (RIR) is a process by which certain decision making units (DMUs) reallocate resources among themselves; a process that occurs frequently in many enterprises. In this paper, a new data envelopment analysis (DEA) approach is developed to select the best cooperative partner DMU. Context-dependent DEA is used to identify the different levels of best-practice frontiers. Two DEA-based models are established for two cooperative scenarios, namely, resources pooling only and best-practice sharing. A cooperative method is applied to determine how to reallocate the input resources, and Shapley value is used to estimate the revenue changes that the various DMUs should expect after RIR. Two different situations with different objectives are considered. One objective is to maximize total revenue for the partnership, while the other is to maximize the Shapley value. The proposed approaches are illustrated with two examples.

Suggested Citation

  • Jie Wu & Qingyuan Zhu & Wade D Cook & Joe Zhu, 2016. "Best cooperative partner selection and input resource reallocation using DEA," Journal of the Operational Research Society, Palgrave Macmillan;The OR Society, vol. 67(9), pages 1221-1237, September.
    • Handle: RePEc:pal:jorsoc:v:67:y:2016:i:9:d:10.1057_jors.2016.26
    DOI: 10.1057/jors.2016.26
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    Cited by:

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    2. Feng Li & Qingyuan Zhu & Liang Liang, 2019. "A new data envelopment analysis based approach for fixed cost allocation," Annals of Operations Research, Springer, vol. 274(1), pages 347-372, March.
    3. Amin, Gholam R. & Ibn Boamah, Mustapha, 2023. "Modeling business partnerships: A data envelopment analysis approach," European Journal of Operational Research, Elsevier, vol. 305(1), pages 329-337.
    4. An, Qingxian & Wen, Yao & Ding, Tao & Li, Yongli, 2019. "Resource sharing and payoff allocation in a three-stage system: Integrating network DEA with the Shapley value method," Omega, Elsevier, vol. 85(C), pages 16-25.
    5. Liesiö, Juuso & Andelmin, Juho & Salo, Ahti, 2020. "Efficient allocation of resources to a portfolio of decision making units," European Journal of Operational Research, Elsevier, vol. 286(2), pages 619-636.
    6. Li, Yongjun & Xie, Jianhui & Wang, Meiqiang & Liang, Liang, 2016. "Super efficiency evaluation using a common platform on a cooperative game," European Journal of Operational Research, Elsevier, vol. 255(3), pages 884-892.
    7. Sheng Dai & Natalia Kuosmanen & Timo Kuosmanen & Juuso Liesio, 2023. "Optimal resource allocation: Convex quantile regression approach," Papers 2311.06590, arXiv.org.

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