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Searching the Efficient Frontier in Data Envelopment Analysis

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  • P. Korhonen

Abstract

In this paper, we deal with the problem of searching the efficient frontier in Data Envelopment Analysis (DEA). Our aim is to show that the free aim approach developed to make a search on the efficient frontier in multiple objective programming can also be used in DEA. This kind of analysis is needed when among others a) a radial projection is not acceptable, b) there are restrictions on some input and output values, or c) a decision maker (DM) would like to make a decision making unit (DMU) with the most preferred input and output values. The search can be applied to CCR/BCC-models, input-oriented/output-oriented models, and to the models with extra constraints. To make a free search on the efficient frontier, we recommend the use of Pareto Race (Korhonen and Wallenius [1988]) for this purpose. In Pareto Race, the DM may simply control the search with some function keys. The information is displayed to the DM as bar graphs and in numeric form. The search can be terminated at any time, the DM wishes. A numerical example is used to illustrate the approach.

Suggested Citation

  • P. Korhonen, 1997. "Searching the Efficient Frontier in Data Envelopment Analysis," Working Papers ir97079, International Institute for Applied Systems Analysis.
    • Handle: RePEc:wop:iasawp:ir97079
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    References listed on IDEAS

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    1. Tarja Joro & Pekka Korhonen & Jyrki Wallenius, 1998. "Structural Comparison of Data Envelopment Analysis and Multiple Objective Linear Programming," Management Science, INFORMS, vol. 44(7), pages 962-970, July.
    2. Thanassoulis, E. & Dyson, R. G., 1992. "Estimating preferred target input-output levels using data envelopment analysis," European Journal of Operational Research, Elsevier, vol. 56(1), pages 80-97, January.
    3. 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.
    4. Pekka Korhonen & Jyrki Wallenius, 1988. "A pareto race," Naval Research Logistics (NRL), John Wiley & Sons, vol. 35(6), pages 615-623, December.
    5. P. Korhonen, 1998. "Multiple Objective Programming Support," Working Papers ir98010, International Institute for Applied Systems Analysis.
    6. R. D. Banker & A. Charnes & W. W. Cooper, 1984. "Some Models for Estimating Technical and Scale Inefficiencies in Data Envelopment Analysis," Management Science, INFORMS, vol. 30(9), pages 1078-1092, September.
    7. Korhonen, Pekka J. & Laakso, Jukka, 1986. "A visual interactive method for solving the multiple criteria problem," European Journal of Operational Research, Elsevier, vol. 24(2), pages 277-287, February.
    8. Charnes, A. & Cooper, W. W. & Rhodes, E., 1979. "Measuring the efficiency of decision-making units," European Journal of Operational Research, Elsevier, vol. 3(4), pages 339-338, July.
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    Cited by:

    1. Per Agrell & Jørgen Tind, 2001. "A Dual Approach to Nonconvex Frontier Models," Journal of Productivity Analysis, Springer, vol. 16(2), pages 129-147, September.
    2. Jahanshahloo, G.R. & Shirzadi, A. & Mirdehghan, S.M., 2009. "Finding strong defining hyperplanes of PPS using multiplier form," European Journal of Operational Research, Elsevier, vol. 194(3), pages 933-938, May.
    3. Jahanshahloo, G.R. & Hosseinzadeh Lotfi, F. & Zhiani Rezai, H. & Rezai Balf, F., 2007. "Finding strong defining hyperplanes of Production Possibility Set," European Journal of Operational Research, Elsevier, vol. 177(1), pages 42-54, February.
    4. P. Korhonen & A. Siljamaeki & M. Soismaa, 1998. "Practical Aspects of Value Efficiency Analysis," Working Papers ir98042, International Institute for Applied Systems Analysis.
    5. G. R. Jahanshahloo & A. Shirzadi & S. M. Mirdehghan, 2008. "Finding The Reference Set Of A Decision Making Unit," Asia-Pacific Journal of Operational Research (APJOR), World Scientific Publishing Co. Pte. Ltd., vol. 25(04), pages 563-573.
    6. Pekka Korhonen & Margareta Soismaa & Aapo Siljamäki, 2002. "On the Use of Value Efficiency Analysis and Some Further Developments," Journal of Productivity Analysis, Springer, vol. 17(1), pages 49-64, January.
    7. T. Joro, 1998. "Models for Identifying Target Units in Data Envelopment Analysis: Comparison and Extension," Working Papers ir98055, International Institute for Applied Systems Analysis.
    8. Amineh Ghazi & Farhad Hosseinzadeh Lotfı & Masoud Sanei, 2022. "Finding the strong efficient frontier and strong defining hyperplanes of production possibility set using multiple objective linear programming," Operational Research, Springer, vol. 22(1), pages 165-198, March.
    9. Pekka Korhonen & Sari Stenfors & Mikko Syrjänen, 2003. "Multiple Objective Approach as an Alternative to Radial Projection in DEA," Journal of Productivity Analysis, Springer, vol. 20(3), pages 305-321, November.
    10. Giovanni Fraquelli & Piercarlo Frigero & Fulvio Sugliano, 2001. "Competitività E Divari Di Efficienza Nell'Industria Italiana," CERIS Working Paper 200101, CNR-IRCrES Research Institute on Sustainable Economic Growth - Torino (TO) ITALY - former Institute for Economic Research on Firms and Growth - Moncalieri (TO) ITALY.
    11. Peter Bogetoft & Kurt Nielsen, 2005. "Internet Based Benchmarking," Group Decision and Negotiation, Springer, vol. 14(3), pages 195-215, May.
    12. A. Ghazi & F. Hosseinzadeh Lotfi, 2023. "Marginal rates in DEA using defining hyperplanes of PPS with CRS technology," Operational Research, Springer, vol. 23(1), pages 1-37, March.

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