IDEAS home Printed from https://ideas.repec.org/a/wsi/ijitdm/v14y2015i06ns0219622014500114.html
   My bibliography  Save this article

Aggregated Ratio Analysis in DEA

Author

Listed:
  • Yong Zha

    (School of Management, University of Science and Technology of China, Hefei, Anhui 230026, P. R. China)

  • Liang Liang

    (School of Management, University of Science and Technology of China, Hefei, Anhui 230026, P. R. China)

Abstract

DEA and ratio analysis are commonly viewed as alternatively effective tools in assessing the performance of different DMUs. Many researches have been developed to reveal their inherent relationship and to explore the integration of both methods as well. In this paper, we first question Theorem 1 by Wu et al. (International Journal of Information Technology & Decision Making 4(3) (2005) 369–384) and illustrate a counter example to show the nonequivalence between the aggregated ratio model they proposed and CCR model. The errors which existed in its proof are also indicated. Further, an improved aggregated ratio model is established to better comprehend the inner relationship between the two methods. We demonstrate its equivalence to traditional CCR model, and propose an inference that the observed DMU is ratio efficient if and only if it is CCR efficient. Numerical analysis carefully describes the nontrivial difference between the proposed model and that by Wu et al. (International Journal of Information Technology & Decision Making 4(3) (2005) 369–384), and validates the feasibility of our model.

Suggested Citation

  • Yong Zha & Liang Liang, 2015. "Aggregated Ratio Analysis in DEA," International Journal of Information Technology & Decision Making (IJITDM), World Scientific Publishing Co. Pte. Ltd., vol. 14(06), pages 1285-1297, November.
    • Handle: RePEc:wsi:ijitdm:v:14:y:2015:i:06:n:s0219622014500114
    DOI: 10.1142/S0219622014500114
    as

    Download full text from publisher

    File URL: http://www.worldscientific.com/doi/abs/10.1142/S0219622014500114
    Download Restriction: Access to full text is restricted to subscribers
    File URL: https://libkey.io/10.1142/S0219622014500114?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Ali, Agha Iqbal & Lerme, Catherine S. & Seiford, Lawrence M., 1995. "Components of efficiency evaluation in data envelopment analysis," European Journal of Operational Research, Elsevier, vol. 80(3), pages 462-473, February.
    2. Desheng Wu & Liang Liang & Zhimin Huang & Susan X. Li, 2005. "Aggregated Ratio Analysis In Dea," International Journal of Information Technology & Decision Making (IJITDM), World Scientific Publishing Co. Pte. Ltd., vol. 4(03), pages 369-384.
    3. M I Gonzalez-Bravo, 2007. "Prior-Ratio-Analysis procedure to improve data envelopment analysis for performance measurement," Journal of the Operational Research Society, Palgrave Macmillan;The OR Society, vol. 58(9), pages 1214-1222, September.
    4. Yu, Ming-Miin & Lin, Erwin T.J., 2008. "Efficiency and effectiveness in railway performance using a multi-activity network DEA model," Omega, Elsevier, vol. 36(6), pages 1005-1017, December.
    5. Wu, Desheng Dash, 2009. "Performance evaluation: An integrated method using data envelopment analysis and fuzzy preference relations," European Journal of Operational Research, Elsevier, vol. 194(1), pages 227-235, April.
    6. Chen, Yao & Iqbal Ali, Agha, 2002. "Output-input ratio analysis and DEA frontier," European Journal of Operational Research, Elsevier, vol. 142(3), pages 476-479, November.
    7. Charnes, A. & Cooper, W. W. & Rhodes, E., 1978. "Measuring the efficiency of decision making units," European Journal of Operational Research, Elsevier, vol. 2(6), pages 429-444, November.
    8. Cook, Wade D. & Hababou, Moez, 2001. "Sales performance measurement in bank branches," Omega, Elsevier, vol. 29(4), pages 299-307, August.
    9. Thanassoulis, E. & Boussofiane, A. & Dyson, R. G., 1996. "A comparison of data envelopment analysis and ratio analysis as tools for performance assessment," Omega, Elsevier, vol. 24(3), pages 229-244, June.
    10. Wade Cook & Moez Hababou & Hans Tuenter, 2000. "Multicomponent Efficiency Measurement and Shared Inputs in Data Envelopment Analysis: An Application to Sales and Service Performance in Bank Branches," Journal of Productivity Analysis, Springer, vol. 14(3), pages 209-224, November.
    11. Ozren Despić & Mladen Despić & Joseph Paradi, 2007. "DEA-R: ratio-based comparative efficiency model, its mathematical relation to DEA and its use in applications," Journal of Productivity Analysis, Springer, vol. 28(1), pages 33-44, October.
    12. Wen-Min Lu & Shiu-Wan Hung, 2008. "Benchmarking The Operating Efficiency Of Global Telecommunication Firms," International Journal of Information Technology & Decision Making (IJITDM), World Scientific Publishing Co. Pte. Ltd., vol. 7(04), pages 737-750.
    13. Chen, Wen-Chih & McGinnis, Leon F., 2007. "Reconciling ratio analysis and DEA as performance assessment tools," European Journal of Operational Research, Elsevier, vol. 178(1), pages 277-291, April.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Tien-Hsiang Chang & Ling-Jing Kao & Tsung-Yin Ou & Hsin-Pin Fu, 2018. "A Hybrid Method to Measure the Operational Performance of Fast Food Chain Stores," International Journal of Information Technology & Decision Making (IJITDM), World Scientific Publishing Co. Pte. Ltd., vol. 17(04), pages 1269-1298, July.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. M C A Silva Portela & E Thanassoulis & G Simpson, 2004. "Negative data in DEA: a directional distance approach applied to bank branches," Journal of the Operational Research Society, Palgrave Macmillan;The OR Society, vol. 55(10), pages 1111-1121, October.
    2. Cook, Wade D. & Liang, Liang & Zhu, Joe, 2010. "Measuring performance of two-stage network structures by DEA: A review and future perspective," Omega, Elsevier, vol. 38(6), pages 423-430, December.
    3. Kao, Chiang, 2014. "Network data envelopment analysis: A review," European Journal of Operational Research, Elsevier, vol. 239(1), pages 1-16.
    4. Zha, Yong & Liang, Liang, 2010. "Two-stage cooperation model with input freely distributed among the stages," European Journal of Operational Research, Elsevier, vol. 205(2), pages 332-338, September.
    5. Roets, Bart & Verschelde, Marijn & Christiaens, Johan, 2018. "Multi-output efficiency and operational safety: An analysis of railway traffic control centre performance," European Journal of Operational Research, Elsevier, vol. 271(1), pages 224-237.
    6. Jie Wu & Beibei Xiong & Qingxian An & Jiasen Sun & Huaqing Wu, 2017. "Total-factor energy efficiency evaluation of Chinese industry by using two-stage DEA model with shared inputs," Annals of Operations Research, Springer, vol. 255(1), pages 257-276, August.
    7. Lorenzo Castelli & Raffaele Pesenti & Walter Ukovich, 2010. "A classification of DEA models when the internal structure of the Decision Making Units is considered," Annals of Operations Research, Springer, vol. 173(1), pages 207-235, January.
    8. W D Cook & J Zhu, 2011. "Output-specific input-assurance regions in DEA," Journal of the Operational Research Society, Palgrave Macmillan;The OR Society, vol. 62(10), pages 1881-1887, October.
    9. Cherchye, Laurens & Rock, Bram De & Walheer, Barnabé, 2015. "Multi-output efficiency with good and bad outputs," European Journal of Operational Research, Elsevier, vol. 240(3), pages 872-881.
    10. Paradi, Joseph C. & Rouatt, Stephen & Zhu, Haiyan, 2011. "Two-stage evaluation of bank branch efficiency using data envelopment analysis," Omega, Elsevier, vol. 39(1), pages 99-109, January.
    11. Liu, W.B. & Zhang, D.Q. & Meng, W. & Li, X.X. & Xu, F., 2011. "A study of DEA models without explicit inputs," Omega, Elsevier, vol. 39(5), pages 472-480, October.
    12. Cao, Ting & Cook, Wade D. & Kristal, M. Murat, 2022. "Has the technological investment been worth it? Assessing the aggregate efficiency of non-homogeneous bank holding companies in the digital age," Technological Forecasting and Social Change, Elsevier, vol. 178(C).
    13. Giokas, Dimitris I., 2008. "Assessing the efficiency in operations of a large Greek bank branch network adopting different economic behaviors," Economic Modelling, Elsevier, vol. 25(3), pages 559-574, May.
    14. Cook, Wade D. & Zhu, Joe, 2007. "Classifying inputs and outputs in data envelopment analysis," European Journal of Operational Research, Elsevier, vol. 180(2), pages 692-699, July.
    15. Laurens Cherchye & Bram De Rock & Bart Dierynck & Filip Roodhooft & Jeroen Sabbe, 2013. "Opening the “Black Box” of Efficiency Measurement: Input Allocation in Multioutput Settings," Operations Research, INFORMS, vol. 61(5), pages 1148-1165, October.
    16. Chen, Xiafei & Liu, Zhiying & Zhu, Qingyuan, 2020. "Reprint of "Performance evaluation of China's high-tech innovation process :Analysis based on the innovation value chain"," Technovation, Elsevier, vol. 94.
    17. Antunes, Jorge & Tan, Yong & Wanke, Peter & Jabbour, Charbel Jose Chiappetta, 2023. "Impact of R&D and innovation in Chinese road transportation sustainability performance: A novel trigonometric envelopment analysis for ideal solutions (TEA-IS)," Socio-Economic Planning Sciences, Elsevier, vol. 87(PA).
    18. M I Gonzalez-Bravo, 2007. "Prior-Ratio-Analysis procedure to improve data envelopment analysis for performance measurement," Journal of the Operational Research Society, Palgrave Macmillan;The OR Society, vol. 58(9), pages 1214-1222, September.
    19. Chia-Yen Lee & Andrew Johnson, 2015. "Effective production: measuring of the sales effect using data envelopment analysis," Annals of Operations Research, Springer, vol. 235(1), pages 453-486, December.
    20. Avilés-Sacoto, Sonia Valeria & Cook, Wade D. & Güemes-Castorena, David & Zhu, Joe, 2020. "Modelling Efficiency in Regional Innovation Systems: A Two-Stage Data Envelopment Analysis Problem with Shared Outputs within Groups of Decision-Making Units," European Journal of Operational Research, Elsevier, vol. 287(2), pages 572-582.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:wsi:ijitdm:v:14:y:2015:i:06:n:s0219622014500114. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Tai Tone Lim (email available below). General contact details of provider: http://www.worldscinet.com/ijitdm/ijitdm.shtml .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.