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Aggregate directional distance formulation of DEA with integer variables

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Listed:
  • Youchao Tan
  • Udaya Shetty
  • Ali Diabat
  • T. Pakkala

Abstract

Conventional data envelopment analysis (DEA) models make the assumption of non-negativity and real values in the input and output of the systems that are under study. This paper combines these two interrelated ideas. One is the non-radial measurement of efficiency by establishing an aggregate directional distance formulation of the DEA model (ADDM). Another is the introduction of an integer directional distance function. Usually, directional distance formulations of DEA and ADDM projections of efficient targets for inefficient decision making units (DMUs) have non-integer values. In this paper directional distance function is modified and a mixed integer directional distance formulation of DEA is proposed. This model guarantees integer targets for inefficient DMUs and is applicable to measure efficiency even when input and output variables are negative integer values. Copyright Springer Science+Business Media New York 2015

Suggested Citation

  • Youchao Tan & Udaya Shetty & Ali Diabat & T. Pakkala, 2015. "Aggregate directional distance formulation of DEA with integer variables," Annals of Operations Research, Springer, vol. 235(1), pages 741-756, December.
    • Handle: RePEc:spr:annopr:v:235:y:2015:i:1:p:741-756:10.1007/s10479-015-1891-8
    DOI: 10.1007/s10479-015-1891-8
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