Allocating fixed costs and resources via data envelopment analysis

In this paper we show that data envelopment analysis (DEA) can be viewed as maximising the average efficiency of the decision-making units (DMUs) in an organisation. Building upon this we present DEA based models for: (a) allocating fixed costs to DMUs and (b) allocating input resources to DMUs. Sim...

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Bibliographic Details
Published in:European journal of operational research 2003-05, Vol.147 (1), p.198-216
Main Author: Beasley, J.E
Format: Article
Language:English
Subjects:
Cross-efficiencies
Data envelopment analysis
Efficiency
Fixed cost allocation
Resource allocation
Studies
Target setting
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Summary:In this paper we show that data envelopment analysis (DEA) can be viewed as maximising the average efficiency of the decision-making units (DMUs) in an organisation. Building upon this we present DEA based models for: (a) allocating fixed costs to DMUs and (b) allocating input resources to DMUs. Simultaneous to allocating input resources output targets are also decided for each DMU. Numeric results are presented for a number of example problems taken from the literature.
ISSN:0377-2217
1872-6860
DOI:10.1016/S0377-2217(02)00244-8