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Buffered-ranking intervals for virtual profit efficiency analysis

Author

Listed:
  • Yongqiao Wang

    (Zhejiang Gongshang University)

  • He Ni

    (Zhejiang Gongshang University)

  • Stan Uryasev

    (Stony Brook University)

Abstract

The efficiency ranking of a decision making units (DMU) measures its relative position among a group of DMUs over sets of feasible virtual prices that characterize preferences for input and output variables. But the efficiency ranking of a DMU conveys no information about the gap between this DMU and those superior and peer DMUs. So we propose an alternative efficiency measure named buffered-ranking for efficiency analysis. The statement that the efficiency buffered-ranking of a DMU is k implies that its efficiency score reaches the average of the top k efficiency scores of all DMUs. The proposed buffered-ranking is monotone with the conventional ranking, and conveys more information about its relation with superior and peer DMUs. When the efficiency score is based on virtual profit, i.e. the difference between virtual revenue and virtual cost, the calculation of the best buffered-ranking is equivalent to a continuous linear program. We also study the worst buffered-ranking that is opposite to the best buffered-ranking. Experiments demonstrate the advantages of buffered-ranking over conventional ranking.

Suggested Citation

  • Yongqiao Wang & He Ni & Stan Uryasev, 2023. "Buffered-ranking intervals for virtual profit efficiency analysis," Central European Journal of Operations Research, Springer;Slovak Society for Operations Research;Hungarian Operational Research Society;Czech Society for Operations Research;Österr. Gesellschaft für Operations Research (ÖGOR);Slovenian Society Informatika - Section for Operational Research;Croatian Operational Research Society, vol. 31(4), pages 1149-1181, December.
    • Handle: RePEc:spr:cejnor:v:31:y:2023:i:4:d:10.1007_s10100-023-00847-3
    DOI: 10.1007/s10100-023-00847-3
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    References listed on IDEAS

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