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New common set of weights method in black-box and two-stage data envelopment analysis

Author

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  • Hamid Kiaei

    (University of Mazandaran)

  • Reza Kazemi Matin

    (Islamic Azad University)

Abstract

Data envelopment analysis (DEA) strives to evaluate the production units under their best conditions. DEA flexibility in selecting the appropriate input/output weights always results in unreal and zero weights. Treating decision-making units (DMUs) as black-box regardless of their internal structures misleads the DEA performance evaluation. While considering units as a network process, it is more likely to identify more inefficiency sources. This paper suggests using a new common set of weights (CSWs) approach to evaluate the units in both black-box and two-stage structures based on a unified criterion. Indeed, our contribution to this line of research is as follows: Firstly, we improve the model proposed by Kao and Hung (J Oper res Soc 56(10): 1196–1203, 2005) to calculate the CSWs in a linear-based optimization model. Secondly, a new CSWs method is suggested in the two-stage network DEA (NDEA) as multiple objectives fractional programming (MOFP) problem. Thirdly, the MOFP problem is converted into a single objective linear programming problem in the two-stage network case. Finally, an enlightening application is presented.

Suggested Citation

  • Hamid Kiaei & Reza Kazemi Matin, 2022. "New common set of weights method in black-box and two-stage data envelopment analysis," Annals of Operations Research, Springer, vol. 309(1), pages 143-162, February.
    • Handle: RePEc:spr:annopr:v:309:y:2022:i:1:d:10.1007_s10479-021-04304-9
    DOI: 10.1007/s10479-021-04304-9
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