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A modified discrete Raiffa approach for efficiency assessment and target setting

Author

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  • Sebastián Lozano

    (University of Seville, Escuela Superior de Ingenieros)

  • Narges Soltani

    (York University)

Abstract

In this paper a new Data Envelopment Analysis (DEA) target setting approach is proposed based on a modification of the discrete Raiffa solution of bargaining problems. It is a multistage method that in the first step moves along the segment towards the ideal point, advancing along it as much as possible. If that first intermediate operating point is weak efficient (i.e. some input or output dimensions can be further improved) then the ideal point in the corresponding subspace is computed and a step towards it is taken and so forth until an efficient target is computed. Unlike the discrete Raiffa solution, the procedure is guaranteed to stop after a finite number of steps. The procedure is units and translation invariant and also provides an efficiency measure. The proposed approach can handle preference structure, non-discretionary variables and undesirable outputs.

Suggested Citation

  • Sebastián Lozano & Narges Soltani, 2020. "A modified discrete Raiffa approach for efficiency assessment and target setting," Annals of Operations Research, Springer, vol. 292(1), pages 71-95, September.
    • Handle: RePEc:spr:annopr:v:292:y:2020:i:1:d:10.1007_s10479-020-03662-0
    DOI: 10.1007/s10479-020-03662-0
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