Estimating Returns to Scale in the Presence of Undesirable Factors in Data Envelopment Analysis

Authors

A. Davodabadi Farahani Department of Mathematics, Islamic Azad University, South Tehran Branch, Tehran, Iran

R. Eslami Department of Mathematics, Islamic Azad University, South Tehran Branch, Tehran, Iran

Abstract:

This research identifies returns to scale (RTS) of efficient decision making units (DMUs) with desirable (good) and undesirable (bad) inputs and outputs by presenting a new DEA (data envelopment analysis) approach. In this study, we first introduce a new input-output oriented model to determine efficient DMUs in the presence of undesirable factors and then, returns to scale of these DMUs are estimated by presenting a new non-radial DEA model. So far several RTS approaches has been proposed in DEA literature by many researchers, such as Banker and Thrall’s, Golany and Yu’s, Khodabakhshi’s et al., and Eslami and Khoveyni’s RTS approaches. In the proposed approaches, all inputs and outputs are respectively considered as desirable inputs and outputs while in real world, both desirable and undesirable data may be present. Note that advantage of our proposed approach is capable of estimating RTS of efficient DMUs in the presence of desirable and undesirable data. It is noticeable that, since an inefficient decision making unit (DMU) has more than one projection on the empirical function thus different returns to scales can be obtained for projections of the inefficient DMU by using our proposed RTS approach. Lastly, an empirical example for illustrating purpose is presented and also directions for future research are suggested.

Upgrade to premium to download articles

Already have an account?login

similar resources

estimating returns to scale in the presence of undesirable factors in data envelopment analysis

this research identifies returns to scale (rts) of efficient decision making units (dmus) with desirable (good) and undesirable (bad) inputs and outputs by presenting a new dea (data envelopment analysis) approach. in this study, we first introduce a new input-output oriented model to determine efficient dmus in the presence of undesirable factors and then, returns to scale of these dmus are es...

full text

Developing a Data Envelopment Analysis Methodology for Supplier Selection in the Presence of Fuzzy Undesirable Factors

full text

Creating Full Envelopment in Data Envelopment Analysis with Variable Returns to Scale Technology

In this paper, weak defining hyperplanes and the anchor points in DEA, as an important subset of the set of extreme efficient points of the Production Possibility Set (PPS), are used to construct unobserved DMUs and in the long run to improve the envelopment of all observed DMUs. There has been a surge of articles on improving envelopment in recent years. What has been done first is in Constant...

full text

Estimation of Returns to Scale in the Presence of Undesirable (bad) Outputs in DEA when the Firm is Regulated

The calculation of RTS amounts to measuring a relationship between inputs and outputs in a production structure. There are many methods to measure RTS in the primal space or the dual space. One of the main approaches is using the multiplier on the convexity constraint. But returns to scale measurements in DEA models are affected by the presence of regulatory constraints. These additional constr...

full text