Multiple Objective Approach as an Alternative to Radial Projection in DEA

Radial projection is a standard technique applied in data envelopment analysis (DEA) to calculate efficiency scores for input and/or output variables. In this paper, we have studied the appropriateness of radial projection for target setting. We have created a situation where the decision making uni...

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Vydáno v:Journal of productivity analysis Ročník 20; číslo 3; s. 305 - 321
Hlavní autoři: KORHONEN, PEKKA, STENFORS, SARI, SYRJÄNEN, MIKKO
Médium: Journal Article
Jazyk:angličtina
Vydáno: Norwell Kluwer Academic Publishers 01.11.2003
Springer Nature B.V
Témata:
Allocative efficiency
Data envelopment analysis
Decision making
Economic value
Efficiency metrics
Efficiency objectives
Experiments
Information economics
Linear programming
Management science
Objective functions
Price efficiency
Prices
Students
Studies
Time management
ISSN:0895-562X, 1573-0441
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Shrnutí:Radial projection is a standard technique applied in data envelopment analysis (DEA) to calculate efficiency scores for input and/or output variables. In this paper, we have studied the appropriateness of radial projection for target setting. We have created a situation where the decision making units (DMUs) are free to choose their own target values on the efficient frontier and then compared the results to those of radial projection. In practice, target values are primarily used for future goal attainment; hence, not only preferences but also, and on the whole, change in time frame, affect the choice of target values. Based on that, we conducted an empirical experiment with an aim to study how the DMUs choose their most preferred target values on the efficient frontier. The subjects, who all were students of the Helsinki School of Economics, were given the freedom to explore their personalized efficient frontiers by using a multiple objective linear programming (MOLP) approach. To study various and relevant scenarios, the personalized efficient frontiers for all students were constructed in such a way that the current position of each student in relation to the frontier made him/her inefficient, efficient, or super-efficient. The results show that the use of radial projection for target setting is too restrictive.
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ISSN:0895-562X
1573-0441
DOI:10.1023/a:1027351816946