Sensitivity analysis of inefficient units in data envelopment analysis

In data envelopment analysis (DEA) efficient decision making units (DMUs) are of primary importance as they define the efficient frontier. By means of modified CCR model, in which the test DMU is excluded from the reference set, we are able to determine what perturbations of data can be tolerated before frontier DMUs become nonfrontier. In this paper we discuss simultaneous data perturbations in all DMUs, where the efficiency of the test DMU is deteriorating while the efficiencies of the other DMUs are improving. Necessary and sufficient conditions for preserving a DMU’s efficiency classification presented by Zhu [8] are developed and improved when various data changes are applied to all DMUs. The region, for preserving a DMU’s classification, that is, greater than the region presented in Zhu [8] is then calculated.