Utilizing Monte Carlo Method for Ranking Extreme Efficient Units in Data Envelopment Analysis

Authors

  • Gh-R .Jahanshahloo Department of Mathematics, Kharazmi University, Tehran, Iran
  • M .Zahedi-Seresht Department of Mathematics, Kharazmi University, Tehran, Iran Corresponding author
Abstract:

Data envelopment analysis (DEA) is a mathematical programming method for calculatingefficiency of decision making units (DMU). In calculating the efficiency score of unitsthrough DEA we may come up with some efficient units. But the question is among theseefficient units which of them is better. As we know, it is possible to rank inefficient unitsthrough efficiency score; however, for ranking efficient units it is not helpful and othermethods should be developed in these regards. To obviate this problem there have been somany attempts in the literature which have their pros and cons. Cross-efficiency method wasfirst introduced by Sexon et al. for ranking efficient units. The major problem of this methodis alternative optimal solutions in each model which must be solved for each DMU. Anotherproblem of this method is dependency of obtained solutions on the solution obtained by otherunits. Another method which has widely been used is super efficiency, presented byAnderson and Petersen. There are several flaws in their suggested method. Infeasibility,instability, dependency of the model on the input and output orientation and non-zero slackvariables are the weaknesses of this method which may occur in specific problems. Thisarticle is an attempt to present a method which does not have the aforementioned problemsand can be utilized to calculate the rank of extreme efficient units through using the Hit orMiss Monte Carlo method. At the end of the article some examples are made in order to showthe efficiency of the presented method.

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Journal title

volume 1  issue 1

pages  23- 40

publication date 2015-03-21

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